Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A business rents machinery at a rate of $700 per machine each month. One machine is able to make 1000 units in a month. At most 10 machines can be housed in the factory. The monthly rent for the factory is $4900. Other expenses are $2 per unit. What is the unit cost if 8500 units are produced in a month?

  • A$3.19
  • B$3.23
  • C$3.28
  • D$3.32

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