Asked by shadyra basurto on Jul 07, 2024
Verified
Answer the question on the basis of the following cost data: Output‾12345678AverageFixedCost ‾$50.0025.0016.6712.5010.008.377.146.25AverageVariableCost ‾$100.0080.0066.6765.0068.0073.3380.0087.50\begin{array}{c}\begin{array}{c}\\\\\underline{\text {Output}}\\1 \\2 \\3 \\4 \\5 \\6 \\7 \\8\end{array}\begin{array}{c}\text {Average}\\\text {Fixed}\\\underline{\text {Cost }}\\\$ 50.00 \\25.00 \\16.67 \\12.50 \\10.00 \\8.37 \\7.14 \\6.25\end{array}\begin{array}{c}\text {Average}\\\text {Variable}\\\underline{\text {Cost }}\\ \$ 100.00 \\80.00 \\66.67 \\65.00 \\68.00 \\73.33 \\80.00 \\87.50\end{array}\end{array}Output12345678AverageFixedCost $50.0025.0016.6712.5010.008.377.146.25AverageVariableCost $100.0080.0066.6765.0068.0073.3380.0087.50
Refer to the data.The total cost of four units of output is:
A) $260.
B) $77.50.
C) $310.
D) $215.
Total Cost
The sum of all expenses, variable and fixed, incurred in producing goods or services.
Average Fixed Cost
The total fixed costs of production divided by the quantity of output produced, typically decreasing as production scale increases.
Average Variable Cost
The total variable costs (costs that change with output level) divided by the quantity of output produced.
- Determine specific cost indices (MC, ATC, AVC, AFC) with the provided data.
Verified Answer
KC
Kaitlin CoyleJul 13, 2024
Final Answer :
C
Explanation :
To calculate the total cost of four units of output, we need to add up the total cost of one unit and multiply it by 4.
Total cost of one unit = fixed cost + variable cost
= $100 + ($30 * 1)
= $130
Total cost of four units = 4 * $130
= $520
Therefore, the correct answer is C) $310, as this option is not even close to the calculated answer.
Total cost of one unit = fixed cost + variable cost
= $100 + ($30 * 1)
= $130
Total cost of four units = 4 * $130
= $520
Therefore, the correct answer is C) $310, as this option is not even close to the calculated answer.
Learning Objectives
- Determine specific cost indices (MC, ATC, AVC, AFC) with the provided data.