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:

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.

therefore, extra cost incurred

= $370,000-$300,000

= $70,000.

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