Melissa Company Produces and Sells a Product That Has Variable

question 21

Multiple Choice

Melissa Company produces and sells a product that has variable costs of $8 per unit and fixed costs of $240,000 per year.If 20,000 units are produced and sold in a year,what is the cost per unit?

• A)$5
• B)$8
• C)$12
• D)$20

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Definitions:

Learning by Doing

The process where productivity is increased through practice, self-perfection, and minor innovations.

Cost-Output Elasticity

A measure of how responsive the total cost of production is to changes in the quantity of output produced.

Learning Curve

A graphical representation showing how an increase in learning or experience can lead to improved efficiency and a decrease in the time required to complete a task.

Total Cost Function

A mathematical relationship that represents the total cost of production depending on the level of output or other variables.