Question

Calculate the fixed and variable costs from the following figures:

Answer 1

Total Incremental Cost = 7,940 – 5,375 = Rs. 2,565
Incremental output = 1,810 – 784 = 1,026 units
Variable cost per unit (Avc)

= 2565/1026 = Rs 2.50
Total cost for 1,810 units = Rs. 7,940
Variable Cost for 1,810 unit = 1,810 × 2.50
= Rs. 4,525
Fixed Cost = TC – VC
= 7,940 – 4,525
= Rs. 3,415
Fixed cost = Rs. 3,415 and Variable Cost 

= Rs. 2.50 per unit.