Question

A small clothing firm currently produces 50,000 shirts and blouses per month. The cost of its factory, raw materials, and labor is $500,000. If it is to increase production by 5,000 and that requires and additional labor and raw material expense of $100,000, what is the best estimate of costs of the increase production?a. $5b. $10c. $20d. $50e. $100

Answer 1

Cost per unit= $50

Step-by-step explanation:

Giving the following information:

A small clothing firm currently produces 50,000 shirts and blouses per month. The cost of its factory, raw materials, and labor is $500,000.

If it is to increase production by 5,000 and that requires additional labor and raw material expense of $100,000.

Cost per unit= Total cost/Q=100000/5000= $50