Solve this:

Dear Student,
TFC = Rent + Number of compulsory workers x Salary paid + Interest on capital + Compulsory electricity units x 10 + Insurance premium + Compulsory telephone bill
TFC = 10000 + (20 x 200) + 5000 + (30 x 10) + 1500 + 625
TFC = ₹21425

Firm is working at 80% capacity, so units produced = 80% x 100 = 80 units
TVC = 80% of ( salary to workers seasonal + raw material + electricity bill for 70 units + telephone bill of 550 calls)
TVC = 80% of ( 30 x 200 + 6000 + 700 + 1375)
TVC = 80% x 14075
TVC = ₹11260

TC= TFC + TVC = 21425 + 11260 = ₹32685
AFC = TFC/no.of units = 21425/80 = ₹267.8125
AVC = TVC/no. of units = 11260/80 = ₹140.75

Regards

  • 1
What are you looking for?