US CMA Part 2 · Chapter 6 · Question 11 of 22
Gilford Instruments' total cost is $50,000 at 1,000 units and $53,800 at 1,100 units. What is the marginal (incremental) cost per unit over this range?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $38.00
Explanation
Marginal cost per unit = change in total cost / change in output = ($53,800 - $50,000) / (1,100 - 1,000) = $3,800 / 100 = $38.00. $48.91 and $50.00 are average costs, which include fixed costs that do not change with the extra units.
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