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Over the last three months, Tau Ltd. has seen the following production costs: April: 550 units, $11,000 total cost. May: 1,100 units, $16,500 total cost.

  • Over the last three months, Tau Ltd. has seen the following production costs:
    • April: 550 units, $11,000 total cost.
    • May: 1,100 units, $16,500 total cost.
    • June: 1,650 units, $19,800 total cost.
  • Requirement: Calculate the unit cost for each month, identify the cost behavior, and explain the implications for production scaling.

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