How to work out highest average cost?
Understand the Problem
The question is asking how to calculate the highest average cost, which involves determining the average of a set of costs and identifying the highest value among them. This requires an understanding of statistical concepts related to averages and comparisons.
Answer
Divide the total production cost by units produced and compare averages to find the highest.
To find the highest average cost, calculate the average cost by dividing the total production cost by the units produced. Compare average costs from different periods or across different products to determine the highest.
Answer for screen readers
To find the highest average cost, calculate the average cost by dividing the total production cost by the units produced. Compare average costs from different periods or across different products to determine the highest.
More Information
Average cost is calculated by dividing total production costs by the number of units produced. The highest average cost is when this ratio is the largest.
Tips
Common mistakes include not accounting for all fixed and variable costs, leading to an inaccurate average cost calculation.
Sources
- Economics 101: How To Calculate Average Cost | Indeed.com - indeed.com
- Average Cost (Per-Unit Cost) | Formula + Calculator - Wall Street Prep - wallstreetprep.com
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