Asked by Gurpreet Verka on Jul 23, 2024
Verified
(Table: Cakes) Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 100 cakes per day,what is her average total cost?
A) $4
B) $25
C) $29
D) $625
Average Total Cost
The per-unit cost of production, calculated by dividing the total cost by the quantity of output produced.
Mixers
Devices used to blend or mix substances together, often found in kitchens or bars for preparing food or cocktails.
- Explore and calculate the average fixed, variable, and total financial outlays.
- Ascertain the connection between production numbers and cost estimates.
Verified Answer
DR
Doris RiveraJul 26, 2024
Final Answer :
C
Explanation :
The total cost for 3 mixers is $1,200 (fixed cost) + $600 (variable cost for 300 cakes) = $1,800.
The average total cost for 3 mixers is then $1,800/100 = $18 per cake.
Comparing with the other options, purchasing 3 mixers would have the lowest average total cost.
The average total cost for 3 mixers is then $1,800/100 = $18 per cake.
Comparing with the other options, purchasing 3 mixers would have the lowest average total cost.
Learning Objectives
- Explore and calculate the average fixed, variable, and total financial outlays.
- Ascertain the connection between production numbers and cost estimates.