(a) Total fixed costs are $10 000 per week and the variable cost per unit is $8....
Question:
(a) Total fixed costs are $10 000 per week and the variable cost per unit is $8. Write the algebraic expression for the cost function and graph it. What are the assumptions of the cost function?
(b) Total fixed costs are $25 000 per week up to 2000 units a week and then jump to $35 000 per week. The variable cost per unit is $8. Write the algebraic expression for the cost function and graph it.
(c) The average cost to produce 10 000 units is $45 and the average cost to produce 12 000 units is $44. Estimate the average cost to produce 15 000 units.
(d) The total cost function for Hot Dog Days, a hot dog cart business, is TC = $5000 + 45% × total revenues. Estimate the total cost for a month when total revenues are $10 000.
Step by Step Answer:
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey