If total variable cost is Rs. 240,000 for 12,000 units, what is the variable cost per unit?
Correct answer: B. Rs. 20
- A. Rs. 15
- B. Rs. 20
- C. Rs. 24
- D. Rs. 30
Explanation
Variable cost per unit equals total variable cost divided by units produced: Rs. 240,000 divided by 12,000 equals Rs. 20. The total variable cost changes with output, but the unit rate remains constant within the relevant range.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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