Determine the monthly volume at which the average cost per serving is $0.70.

Accounting
Tutor: None Selected Time limit: 1 Day

Determine the monthly volume at which the average cost per serving is $0.70.

The total monthly operating costs of Chili To Go are: 

$12,000 + $0.50X where X = servings of chili 

The following monthly volumes: 100; 1,000; 5,000; and 10,000.

Jan 13th, 2015

$12,000 + $0.50X where X = servings of chili 

The following monthly volumes: 100; 1,000; 5,000; and 10,000.

total monthly cost=$12000+$0.50x

total volumes=16100

16100/$12,000+x=$0.70

    cross multiply

0.7(12,000+x)=16,100

8,400+0.7x=16,100

0.7x=16,100-8,400  

0.7x=7,700

7x=77,000

x=11,000    , volume at which  average cost per serving is $ 0.7
Jan 13th, 2015

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Jan 13th, 2015
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