Question

Revenue for producing one or more unit is $10

Answer 1

solution :- we should consider O in the given information Only verage Variable cost and revenue from producing one unit. > we should not consider Rent because ev it is. a fixed cost and irrespectives & our production level we will incurce that cost i,c., even... if we produce. Zero Co) units we have to incury that coct. B rowan .. while making decicion we have to considen Only , Variable. Cost. • Revenue from one unit $ 10 ley: Variable cost per unit : (89) Contribution As contribution is positive we should increase the production. torstol prom o

(2 Rent is a fined cat by it's nature. and fixed cost will stop being a cost aftes meet's break even sales. the company At breakeven calles units will be equals to fixed cost. Contribution from total Ascueming Breakeven sale unitt = X conteibution from each unit = $1. Total contribution 1xx = x 4 fined cost (Rent) = $10 x x $1 $10 x = 10 units. Cost : After producing to cenits rent Lill be Stoped being acting as e, after producing locenits contribution from each product sold for the entity will be profit
After producing 10 units (i.e., from 11th unit) fixed cost (RENT ) will be stopped being acting as cost.

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