Answer :
Total profit earned by the firm is $2,325 considering total cost $6000 and marginal cost per unit = $0.05.
No. of units = 150
Average cost per unit = $24.50
Total cost = 150* 24.50 = $3,675
Selling price per unit = $40
Total selling price = $40*150 = $6000
Profit = $6,000-$3,675 = $2,325
Average total cost of producing 151 units = $24.55
Marginal cost per unit = $24.55-$24.5 = $0.05
Total cost is the total of all costs associated with producing a certain output of any kind. The whole cost approach is preferable from an accounting perspective since operational costs must be attributed to particular assets. Only indirect costs are more likely to be included in short-term decision-making, which makes it far less likely that total cost will be taken into consideration.
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The question was incomplete. Check below the full question.
The information below applies to a competitive firm that sells its output for $40 per unit.
• When the firm produces and sells 150 units of output, its average total cost is $24.50.
• When the firm produces and sells 151 units of output, its average total cost is $24.55.
When the firm produces 150 units of output, its profit is
a. $2,150.00.
b. $2,325.00.
c. $3,100.75.
d. $3,675.00.
