7. Consider the following cost information for a pizzeria:Q (dozens)Variable CostTotal Cost$ 0$3003505012390904201204501504901905406240What is the pizzeria's fixed cost?а.b. Construct a table in which you calculate the marginal cost per dozen pizzas using theinformation on total cost. Also calculate the marginal cost per dozen pizzas using theinformation on variable cost. What is the relationship between these sets of numbers?Comment

The fixed costs are the costs that are incurred even if there is no production. These include the…

Answered: 7. Consider the following cost…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Cost (dollars) 150 100 50 0 5 10 D $15 20 B Output (teapots per day) 5. Refer to Figure above. Which one of the following statements are [TRUE/FALSE]? 0 A. The vertical gap between curves B and C is equal to average variable cost. [TRUE/FALSE] 0 B. Average fixed cost decreases with output. [TRUE/FALSE] 0 C. Line B comes closer to line C as output increases because of a decrease in average fixed cost. [TRUE/FALSE] D. The vertical gap between curves B and C is equal to average fixed cost. [TRUE/FALSE] 0 E. Curve D is the marginal cost curve. [TRUE/FALSE]
Output TFC TVC TC MC АТС A 25 25 ---- -- ---- -- B 1 25 25 50 25 50 C 2 25 40 65 32.5 3 25 70 95 E 4 25 110 33.75 F 5 25 160 50 What is the total cost at point E? 135 125 185 Cannot be determined
5. A toy factory has an annual demand for 20,000 of tops. It cost $1.50 to store one top per year. It costs $500 for each production set-up for these tops and $3.50 to manufacture a single top. Find the total cost function. fM Total Cost of Production is: T(g) = : + gM +, where q is number of units per productionm run; k is cost of storing 2 one item per year; g is cost of manufacturing a single unit of the product; f is fixed set-up cost for a production run; M is total demand of units per year. Given Constants Total Cost Function Find the optimum number of tops per batch as well as the number of batches per year. optimum number of tops optimum number of batches Find the total cost for this optimum production schedule. Optimum Total Cost
2. As an employee of the Rays-R-Us Corporation (a solar panel company), you have been asked to determine the nature of their long-run cost structure. Some cost data has been collected for you and appears in the table below. Quantity of Generators Labor Costs Tools Cost $2 $4 $7 $8 $15 $24 $28 $41 $65 $80 Total Cost Long Run Average Cost $10 12 14 16 20 30 42 1 4 5 8 9 10 70 100 (a) Fill in the missing values in the table. (b) Graph the firm's long-run average cost curve below. (c) Determine the range of output levels over which there exists economies and diseconomies of scale, and mark these ranges on your graph.
(J)
QUESTION 6 At a total cost of $3,100, a company can produce 4 scooters. It has fixed costs of $1,000. If it produces 5 scooters, the costs of production total $3,800. Which of the following statements is true? O Variable costs of producing 4 scooters total $3096. O The average (or per unit) cost of producing 5 scooters is $800 per scooter The total cost curve for this firm is downward sloping Fixed costs will be higher when it produces 5 scooters The marginal cost of producing the fifth scooter is $700
H13). Importance of Understanding Cost Behavior Patterns Recognizing and understanding cost behavior patterns serve multiple purposes within a company. What are at least 4 of them and explain.
(b) Calculate the missing total variable cost figure in the table shown below and clearly show your workings. Quantity (units) Total Variable Cost Marginal Cost 13 ?? 27 115 7
computer system. The last run of the production cost schedule resulted in the incomplete listing shown below (listed as question numbers). From your knowledge of cost theory, solve for the values in the table to the corresponding questions below. During the last few days the Superior Company has been running into problems with its ATC AFC - MC TC TFC TVC 75 75 A 75 100 75 В 1 75 37.5 15 TC total costs, TFC = total fixed costs, TVC = total variable costs, ATC = average total costs, %3D %3D AFC = average fixed costs, AVC = average variable costs, MC = marginal costs What is the correct numerical value for C in the table? 100 37.5 O 57.5 O 20
The following is a cost schedule for A & E Manufacturing Company Ltd for product X. Quantity (Q) Fixed Cost Variable Cost Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost 0 100 1 30 2 25 3 60 4 100 18 Required: Calculate the missing costs and complete the schedule. On one diagram, plot and label the Marginal Cost curve, the Average Fixed Cost curve, Average Variable Cost Curve and the Average Total Cost curve. Explain the relationship which exists between the Marginal Cost Curve and the Average Total Cost Curve. What accounts for the ‘U’ shape of the Average Total Cost Curve?
36) 36) Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's average fixed cost per day when she produces 50 gyros using two workers? A) $2.00 B) $2.40 C) $4.40 D) $6.80 Page Ref: 369-370
Which of tholowing statements is true? O An explicit cost is more important, dolar for dollar, than an implicit cost. An explicit cost is an actual cost an implicit cost is a theoretical cost. Economic costs include both explicit costs and implicit costs O Explicit costs are accounting costs, not economic costs, implicit costs are economic costs, not accounting cos

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