Use the following data for answering Questions 3-6:The Haverford Company is considering three types of plants to make a particular electronic device. Plant A is much more highly automated than plant B, which in turn is more highlyautomated than plant C. For each type of plant, average variable costeach type of plant is as follows:constant so long as output is less than capacity, which is the maximum output of the plant. The cost structure forPlant CPlant APlant BAverage Variable Costs$1.10$2.40$3.70Labor0.90Materials1.201.80Other0.502.402.00$2.50$6.00$7.50Total$300,000$75,000$25,000Total fixed costsAnnual capacity$50,000200,000100,000Derive the average costs of producing 100,000, 200,000, 300,000, and 400,000 devices per year with Plant C. (NOTE: for output exceeding the capacity of a single plant, assume that morethan one plant of this type is built, i.e., all inputs are duplicated in each additional plant. What are the average costs per unit for the four market output levels?a. $8.00 $4.25 $2.375 $1.4375b.$8.00 $8.00 $8.00 $8.00C.$8.00 $15.50 $23.00 $30.50d.$8.00 $7.75 $7.667 $7.625

The table for the costs of Plant C is given below:

Answered: Use the following data for answering…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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