At 1,000 units of output, the fixed cost of production is $12,500 per week. Total cost of producing 1,000 units per week is $28,500 per week. The variable cost of producing 1,000 units of output per week is equal to _____.

Respuesta :

The variable cost of producing 1000 units per week is equal to $16000.

Variable costs are those that change with volume. Raw materials, piece-rate labour, production supplies, commissions, shipping costs, packing costs, and credit card fees are examples of variable costs. The variable costs of production are referred to as "Cost of Goods Sold" in some accounting accounts.

Given,

Fixed cost of production per week =$12500

Total cost of producing 1000 units per week =$28500

then,

variable cost of producing 1000 units per week = 28500-12500=$16000

Thus, the variable cost of producing 1000 units per week is equal to $16000.

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