The table shows the marginal cost for a company's product at various production levels. UnitsMarginal cost ($/unit) UnitsMarginal cost ($/unit)03.21 70002.1810002.86 80002.1720002.76 90002.1930002.73 10,0002.2340002.52 11,0002.3450002.40 12,0002.6160002.22 13,0002.81 (a) Estimate the cost (not including fixed costs) to produce the first 12,000 units by considering batches of 2000 units. Use the initial marginal cost for each batch in your calculations. $ (b) Use batches of 1000 units and the ending marginal cost for each batch to estimate the cost of raising the production level from 4000 to 11,000 units. $
The table shows the marginal cost for a company's product at various production levels. UnitsMarginal cost ($/unit) UnitsMarginal cost ($/unit)03.21 70002.1810002.86 80002.1720002.76 90002.1930002.73 10,0002.2340002.52 11,0002.3450002.40 12,0002.6160002.22 13,0002.81 (a) Estimate the cost (not including fixed costs) to produce the first 12,000 units by considering batches of 2000 units. Use the initial marginal cost for each batch in your calculations. $ (b) Use batches of 1000 units and the ending marginal cost for each batch to estimate the cost of raising the production level from 4000 to 11,000 units. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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780.
Transcribed Image Text:The table shows the marginal cost for a company's product at various production levels.
UnitsMarginal cost
($/unit) UnitsMarginal cost
($/unit)03.2170002.1810002.86 80002.1720002.76 90002.1930002.73 10,0002.2340002.52 11,0002.3450002.40
12,0002.6160002.22 13,0002.81
(a) Estimate the cost (not including fixed costs) to produce the first 12,000 units by considering batches of 2000 units. Use
the initial marginal cost for each batch in your calculations.
$
(b) Use batches of 1000 units and the ending marginal cost for each batch to estimate the cost of raising the production
level from 4000 to 11,000 units.
$
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