What is the average total cost of the eighth unit?

Rationale

$14.00

The average total cost of the eighth unit is calculated by dividing the total cost incurred for producing eight units by the number of units produced. This results in an average cost of $14.00 for the eighth unit.

A ($16.00) YOUR ANSWER

This choice suggests that the average total cost of the eighth unit is higher than the correct calculation. An average cost of $16.00 would imply that the total cost for eight units is $128.00, which does not match the given data.

B ($8.38) YOUR ANSWER

Selecting $8.38 indicates an incorrect understanding of how the average cost is computed. This figure would imply a total cost of approximately $66.08 for eight units, which is not supported by the actual total cost data provided.

C ($14.00) CORRECT

This is the correct answer, as it accurately reflects the average total cost calculated from the total amount spent on producing eight units, yielding an average of $14.00 per unit.

D ($14.67) YOUR ANSWER

Choosing $14.67 suggests a minor overestimation of the average cost. If the average were $14.67, it would indicate a total cost of about $117.36 for eight units, which does not align with the total costs provided in the scenario.

Conclusion

The average total cost of the eighth unit is determined by dividing the total cost by the number of units produced. In this case, the correct average total cost is $14.00, which accurately reflects the data. Other options present incorrect calculations or misunderstandings of the average cost concept, reinforcing the importance of accurate computation in cost analysis.

What is the average total cost of the eighth unit?

$14.00

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