Auto-USA spent $300 million in total to produce 25,000 cars this year. The $300 million breaks...

 

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Auto-USA spent $300 million in total to produce 25,000 cars this year. The $300 million breaks down as follows: The company spent $50 million on fixed costs to run its manufacturing plants and $ 250 million on variable costs ($10,000 of variable costs to produce each car). a. What is the current average cost per car this year? b. Assuming there is no change in fixed costs, what is the total forecasted cost to produce 50,000 cars next year? c. What is the forecasted average cost per car next year? d. What is the best for the company to produce 25000 cars or 5000 cars? And why? Auto-USA spent $300 million in total to produce 25,000 cars this year. The $300 million breaks down as follows: The company spent $50 million on fixed costs to run its manufacturing plants and $ 250 million on variable costs ($10,000 of variable costs to produce each car). a. What is the current average cost per car this year? b. Assuming there is no change in fixed costs, what is the total forecasted cost to produce 50,000 cars next year? c. What is the forecasted average cost per car next year? d. What is the best for the company to produce 25000 cars or 5000 cars? And why?

Answer rating: 100% (QA)

Total Costs to produce 25000 Cars 300 0000000 Total Number of Cars 25000 Cars Average Cost Per Car t... View the full answer