For each level of output compute variable cost vc for each

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Reference no: EM13396429

The accompanying table shows a boat manufacturer's total cost of producing boats.

 

Quantity of Boats

Total Cost

0

 $        450,000

1

 $        490,000

2

 $        510,000

3

 $        520,000

4

 $        540,000

5

 $        570,000

6

 $        610,000

7

 $        670,000

8

 $        750,000

9

 $        870,000

 

1. What is this manufacturer's fixed cost?

2. For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC)

 

Qty of boats

Total Cost

Variable Costs

(a.)

Average Variable Costs

(b.)

Average Total Costs

(c.)

Average Fixed Cost

(d.)

0

$450,000

-

-

-

-

1

490,000

 

 

 

 

2

510,000

 

 

 

 

3

520,000

 

 

 

 

4

540,000

 

 

 

 

5

570,000

 

 

 

 

6

610,000

 

 

 

 

7

670,000

 

 

 

 

8

750,000

 

 

 

 

9

870,000

 

 

 

 

 

3. What is the minimum-cost output?

4. For each level of output, calculate this manufacturer's marginal cost (MC)

 

Qty of boats

TC

Marginal Costs

0

$450,000

-

1

490,000

 

2

510,000

 

3

520,000

 

4

540,000

 

5

570,000

 

6

610,000

 

7

670,000

 

8

750,000

 

9

870,000

 

 

Reference no: EM13396429

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