3. ENGINEERING COSTS:
Value of the economic resources used in the production
of goods and services.
Examples: Land, labor, capital or initial investment,
wages, and salaries.
7. To calculate marginal cost, divide the difference in total cost by
the change in quantity to calculate the marginal cost. The
formula for this calculation is: marginal cost = change in total
cost / change in quantity
For example, a shoe company produces 300 units at the cost of $50. The company then
manufactures an extra 300 units at the cost of $40. The marginal cost is the change in
overall cost, which is $40, divided by the change in quantity, which is 300 extra units. Using
the marginal cost formula gives the following result:
Marginal cost = 40 / 300 = 0.13
The marginal cost is $0.13 per unit.