Corporate Document Service incurs variable costs of 7 every time a document is processed. The business providing
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Corporate Document Service incurs variable costs of £7 every time a document is processed. The business providing the service has fixed costs of £100,000 per month. The selling price for each service is £25.
• By how much does the average cost change between processing 10,000 and 20,000 documents?
Does the marginal cost change in the same way?
• Explain why the average cost changes.
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Related Book For
Accounting For Managers Interpreting Accounting Information For Decision Making
ISBN: 9780470016091
2nd Edition
Authors: Paul M. Collier
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