ECONOMICS

Detailed explanation-1: -Total costs incur in a production process, is divided by total number of output units to calculate the unit costs. A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.

Detailed explanation-2: -The average cost refers to the total cost of production divided by the number of units produced.

Detailed explanation-3: -Cost of production is the total cost incurred by a business to either produce a product or offer their services. Production costs typically include supplies and raw materials that are consumed during production, along with labor expenses.

Detailed explanation-4: -Total Cost of Production = Total Fixed Cost + Total Variable Cost. Now, the quantity of units that has been produced has to be determined. Finally, the average total cost of production is calculated by dividing the total cost of production calculated in step 3 by the number of units produced determined in step 4.

Detailed explanation-5: -Unit cost is determined by combining the variable costs and fixed costs and dividing by the total number of units produced.