Asked by Nayely Quintero on Jul 26, 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 1 mixer and bakes 400 cakes per day,what is her average total cost?
A) $2.50
B) $10
C) $12.50
D) $1,010
Average Total Cost
The total cost of production divided by the number of goods produced; it consists of both fixed and variable costs.
Mixers
Devices used in cooking and baking to blend, beat, or whip ingredients together to form a mixture.
- Scrutinize and compute mean fixed, variable, and sum total costs.
- Explore how variations in production scale influence cost evaluations.
Verified Answer
NV
Nahjea vassallJul 26, 2024
Final Answer :
C
Explanation :
If Pat purchases 1 mixer and bakes 400 cakes per day, her total cost would be $1,000 (fixed cost of $500 + variable cost of $0.50 per cake). Her average total cost would be $2.50 per cake ($1,000 total cost ÷ 400 cakes). This is the lowest average total cost out of the options given, so purchasing 1 mixer would be the best choice.
Learning Objectives
- Scrutinize and compute mean fixed, variable, and sum total costs.
- Explore how variations in production scale influence cost evaluations.