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What is the cost per equivalent unit with respect to materials?

User Cocco
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Answer:

Cost per unit , with respect to material is AVERAGE VARIABLE COST [AVC]

Explanation:

Cost is the expenditure incurred on production.

It can be : Fixed , Variable . Fixed cost is expense on fixed factors (not change-able in short run) , eg machine plant & Variable cost is expense on vairable factors (change-able in short run) , eg raw materials , labour

Total Cost [TC] = Total Fixed Cost [TFC] + Total Variable Cost [TVC]

Average per unit - (Q) Cost : AC i.e [TC/Q] = AFC i.e [TFC/Q] + AVC i.e [TVC/Q]

So , out of total Average Cost , AVC denotes average cost per unit with respect to variable inputs ('materials' here)

User Xartec
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