ABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable cost, average total cost and total cost at the current output level. b. Calculate Economic profit and Accounting profit from the figures given below for ABC Company. (3 marks) • Total revenue $ 500,000 • Wages and salaries $ 40,0000 • Forgone salary $ 80,000 • Interest paid $ 10,000 • Forgone rent $ 10,000 • Raw materials $ 50,000 • Other payments $ 20,000 • Forgone interest $ 7,000
ABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable cost, average total cost and total cost at the current output level. b. Calculate Economic profit and Accounting profit from the figures given below for ABC Company. (3 marks) • Total revenue $ 500,000 • Wages and salaries $ 40,0000 • Forgone salary $ 80,000 • Interest paid $ 10,000 • Forgone rent $ 10,000 • Raw materials $ 50,000 • Other payments $ 20,000 • Forgone interest $ 7,000
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter7: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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- ABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable
cost,
Company. |
|
(3 marks) |
|
• |
Total revenue |
$ |
500,000 |
• |
Wages and salaries |
$ |
40,0000 |
• |
Forgone salary |
$ |
80,000 |
• |
Interest paid |
$ |
10,000 |
• |
Forgone rent |
$ |
10,000 |
• |
Raw materials |
$ |
50,000 |
• |
Other payments |
$ |
20,000 |
• |
Forgone interest |
$ |
7,000 |
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