Find the units that will minimize the cost.

Question

The fixed cost for product A is RM200. The variable cost per unit is given by VC = 0.2q - 20 where q is the product's quantity. Find the units that will minimize the cost.

Answer 1

Minimum cost if VC = 0, so 0.2q - 20 = 0; q = 100 units . Now cost = 200