Vintage cellars manufactures a 1000-bottle wine storage

Reference no: EM13601445

Vintage Cellars manufactures a 1,000-bottle wine storage system that maintains optimum temperature (55-57 °F) and humidity (50-80 percent) for aging wines. The system has a backup battery for power failures and can store red and white wines at different temperatures. The following table depicts how average cost varies with the number of units manufactured and sold (per month):
Quantity Average Cost

1 $12,000 2 10,000 3 8,600 4 7,700 5 7,100 6 7,100 7 7,350 8 7,850 9 8,600 10 9,600
Required:

a. Prepare a table that computes the total cost and marginal cost for each quantity between 1 and 10 units.
b. What is the relation between average cost and marginal cost?
c. What is the opportunity cost of producing one more unit if the company is currently producing and selling four units?
d. Vintage Cellars sells the units for $9,000 each. This price does not vary with the number of units sold. How many units should Vintage manufacture and sell each month?

Reference no: EM13601445

Questions Cloud

During january its first month of operations knox company : during january its first month of operations knox company accumulated the following manufacturing costs raw materials

Av city stocks and sells a particular brand of laptop it : av city stocks and sells a particular brand of laptop. it costs the firm 625 each time it places an order with the

Blue sage mountain produces hinged snowboards the price : blue sage mountain produces hinged snowboards. the price charged affects the quantity sold. the following equation

How can the concept of unit-level activities be applied to : how can the concept of unit-level activities be applied to an airline? more specificallywhat are two examples is of

Vintage cellars manufactures a 1000-bottle wine storage : vintage cellars manufactures a 1000-bottle wine storage system that maintains optimum temperature 55-57 degf and

Gruner also incurs 7 sales commission 048 on each disc : gruner company produces golf discs which it normally sells to retailers for 6.89 each. the cost of manufacturing 17300

Selleck has recently started the manufacture of recrobo a : selleck has recently started the manufacture of recrobo a three-wheeled robot that can scan a home for fires and gas

Sally wilson is planning her retirement she is presently : sally wilson is planning her retirement. she is presently investing in a 401k but needs an additional 500000 to reach

Franklin foods announced that its sales were 1233450 this : franklin foods announced that its sales were 1233450 this year. the company forecasts a growth rate of 16 percent for

User Account

All Pages