Help please! if you can write the formulas

Marketing
Tutor: None Selected Time limit: 1 Day

Screen%20Shot%202014-09-11%20at%202.14.1
Sep 11th, 2014

Total cost(TC)= Variable Cost(VC) + Fixed Cost(FC)

TC =FC + VC

y = mx + c

y - TC

m - VC

x - number of units

c - FC

Forecasted Output(x) = 10,000 units


process one:

x = 10000 units
m = $50.00
c = $100000
 therefore, TC = 50 * 10000 + 100000
= $600,000

process two
x = 10,000units
m = $30.00
c = $250,000
therefore, TC = 30*10000 + 250,000
= $550,000

since $550,000 < $600,000

therefore they used process two.

cost of producing 4000units

process one

TC = 50*4000 + 100000

= $300,000

process two

TC = 30*4000 + 250,000

= $370,000

therefore, extra cost incurred

= $370,000-$300,000

= $70,000.


Sep 11th, 2014

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Sep 11th, 2014
...
Sep 11th, 2014
May 29th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer