Final answer:
The average unit cost is the cost on average of producing a given quantity, calculated by dividing the total cost by the quantity of output produced. For a partially shaped unit that is 25% of the way through the production process, the average cost can still be calculated using the same formula. However, it is important to note that the marginal cost is the cost of producing one additional unit.
Step-by-step explanation:
The average unit cost, also known as average cost, is the cost on average of producing a given quantity. It is calculated by dividing the total cost by the quantity of output produced. For example, if producing two widgets costs a total of $44, the average cost per widget would be $22.
In terms of a partially shaped unit that is 25% of the way through the production process, the average cost would still be calculated using the same formula. If the total cost at this stage is $X and the quantity is Y units, the average cost per unit would be $X/Y.
It is important to note that average cost is different from marginal cost, which is the cost of producing one additional unit. The marginal cost is calculated by finding the change in total cost divided by the change in output. So for the partially shaped unit that is 25% of the way through the production process, its marginal cost would be the change in total cost from 25% completion to 26% completion divided by the change in output.