consider table 3.1. what is the dollar amount of average fixed cost per unit at the production level of 600…

consider table 3.1. what is the dollar amount of average fixed cost per unit at the production level of 600 units? production (units) rent wages supplies tools total cost 0 $300 $200 $0 $100 $600 100 $300 $410 50 $200 $960 200 $300 $650 $100 $300 $1,350 300 $300 $900 $150 $400 $1,750 400 $300 $1,200 $200 $500 $2,200 500 $300 $1,520 $250 $600 $2,670 600 $300 $1,905 $300 $700 $3,205 700 $300 $2,300 $350 $800 $3,750

consider table 3.1. what is the dollar amount of average fixed cost per unit at the production level of 600 units? production (units) rent wages supplies tools total cost 0 $300 $200 $0 $100 $600 100 $300 $410 50 $200 $960 200 $300 $650 $100 $300 $1,350 300 $300 $900 $150 $400 $1,750 400 $300 $1,200 $200 $500 $2,200 500 $300 $1,520 $250 $600 $2,670 600 $300 $1,905 $300 $700 $3,205 700 $300 $2,300 $350 $800 $3,750

Answer

Explanation:

Step1: Identify fixed - cost

Fixed cost does not change with the level of production. From the table, rent is a fixed cost and it is $300 at all production levels.

Step2: Calculate average fixed cost per unit

The formula for average fixed cost (AFC) is $AFC=\frac{FC}{Q}$, where $FC$ is fixed cost and $Q$ is the quantity of production. Here, $FC = 300$ and $Q = 600$. So, $AFC=\frac{300}{600}$.

Step3: Simplify the expression

$\frac{300}{600}=0.5$

Answer:

$0.5$