Final answer:
To determine the company's variable operating expenses per unit, total variable expenses must be divided by the number of units produced. Without specific data, we cannot provide the correct estimate from the options given. Average variable cost is an essential component in calculating and understanding a company's product pricing and profitability.
Step-by-step explanation:
The question asks about the best estimate of the company's variable operating expenses per unit, but lacks sufficient data to provide a specific answer from the options given. To calculate this, we need information on the company's total variable operating expenses and the quantity of output produced. Once we have this data, we would divide the total variable expenses by the number of units produced to obtain the average variable cost per unit.
Average variable cost is calculated by dividing variable cost by quantity of output. For instance, if producing 80 units costs $400, the average variable cost would be $400 divided by 80, equating to $5 per unit. This cost can change depending on the level of output, as fixed costs are spread out over more units with increased production, potentially reducing the average variable cost per unit over time.
Average total cost includes both average variable cost and average fixed cost and always lies above the average variable cost curve. Understanding the relationship between these costs is crucial for a company to price their products appropriately and assess their profitability.