# Can anyone please help me with this question regarding total cost and cost per unit!

gianlucapensotti
Registered, AAT Student Posts:

**7**
Please could someone explain on how to work out the second part of the question regarding calculating the total cost and cost per unit when it comes to 50,000 and 40,000 units.

I have attached both parts of the question for reference, I am fine with the top part (average cost) but am unsure about the second half.

Many thanks

I have attached both parts of the question for reference, I am fine with the top part (average cost) but am unsure about the second half.

Many thanks

## Answers

265For the direct materials cist you have been told to use the figure of £36000, therefore

36000+42000+54000=132000 total cost

Divide that figure by the number of units 50000 and you will get cost per unit

For the 40000units

Variable cost we find by dividing the £36000 by the number of units 50000=0.72 per unit

0.72x40000 units=28800

Same is done for labour

Fixed cost of 54000 is 54000, because it is fixed

Note to remember

Variable cost is fixed per unit, and fixed costs remain fixed in total

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