Total production cost is Rs. 50,000 for 1,000 units and Rs. 50,600 for 1,010 units. What is the marginal cost per additional unit?
Correct answer: B. Rs. 60
- A. Rs. 50
- B. Rs. 60
- C. Rs. 600
- D. Rs. 50,600
Explanation
Marginal cost is the change in total cost divided by the change in output. The additional cost is Rs. 600 for 10 extra units, so the marginal cost is Rs. 60 per unit.
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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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