HUmeWork: Chapter 11, Assignment 2 Score: 0 of 1 pt Concept: Fixed/Variable Cost
ID: 1105009 • Letter: H
Question
HUmeWork: Chapter 11, Assignment 2 Score: 0 of 1 pt Concept: Fixed/Variable Costs 3 Save 15 of 25 (11 complete) HW Score: 40%, 10 of 25 pts Question Help * Meat Packers, Incorporated (MPI) preserves and packages various kinds of meats for transportation to grocery stores. To prepare and transport each meat package to a grocery store, the firm must purchase $40 in raw meat and pay $90 in wages for labor and $60 in fuel costs. In addition, the firm rents a factory for $20,000 per month and makes $7,000 in monthly payments on meat packaging equipment Suppose the firm prepares and transports 2000 packages of meat per month What are the firm's fired and variable costs of production in a given month? The firm's fixed cost of production is S and its vana le cost ofproduction is S Enter nu menc responses usr integers)Explanation / Answer
For each unit of output meat, the firm requires $40 of raw meat, $60 of fuel and $90 in wages. Thus for 2000 units of meat output, the variable costs on raw meat=40*2000=80000, variable cost on fuel=60*2000=120000 and variable cost on wages= 90*2000=180000
Thus Total Variable Cost=180000+120000+80000=380000
The Fixed cost of production=factory rent+monthly payment for packaging=20000+7000=27000
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