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Inventory Turnover Ratio

The highest p...

Question

The highest production cost per unit will be observed at the following level of production:

A

0-100

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B

300-400

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C

800-900

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D

1400-1500

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Solution

The correct option is A 0-100
It can be calculated that the average cost decreases from 0 to 300 units, then increases for the 301st unit, then decreases till the 800th unit and then increases till the 801st unit and then decrease again.
We can see that option (a) is the correct answer.

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