G10 T2 Average and Variable Costs Per Unit

• Business Studies
• Secondary Education

Average and Variable 

Business Costs

Thursday, 30th of January 2025

To review different costs of a business. 

To calculate average costs and variable costs per unit. 

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Which business cost is it? 

delivery

Which business cost is it? 

shop rent

Which business cost is it? 

insurance (تأمين )

Which business cost is it? 

materials and resources

Which business cost is it? 

water bill

Which business cost is it? 

salary/ workers' wages

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Calculate the total cost:
Fixed cost-55,000 Dirhams
Variable cost-65,000 Dirhams

1. 0.84615
2. 1.18181
3. 120,000
4. 3,575000

Match the names of the business costs to their meaning.

Profit is made when the total costs of production are less than the total revenue.

1. true
2. false

We can use the information to decide on the selling price of one abaya. 

Elegance Abaya Factory in Ajman produced 1,000 abayas last month and had a total cost of Dh64,000.

1. 0.0156
2. 64
3. 640
4. 156

Al Ain Dairy company produced 5,000 bottle of milk last month and had a total cost of 25,000 Dirhams. What is the average cost?

1. 5
2. 15
3. 25
4. 30

(Total variable cost/ Output)

24

The Elegance Abaya factory in Ajman produced 1,000 abayas last month. The costs are: rent- 13,000, raw materials- 12,000 AED, electricity (based on consumption) - 2,500 AED and salary for workers- 10,500 AED. Other variable costs added up to 5,000 AED.
a) Calculate the total variable cost. b) Calculate the variable cost per unit.

1000

19500- 19.5

Calculate the variable cost per unit for Lavish Perfumes
Total Fixed Costs: 32,250;
Total Variable Costs: 20,350;
Output: 4,000

1. 3.08
2. 5.08
3. 7.80

Calculate the average cost for January for V Perfumes.
Total Fixed Costs: 32,250
Total Variable Costs: 20,350
Total Output:4,000

1. 9.06 AED
2. 11.56 AED
3. 12.00 AED
4. 13.15 AED

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