5e the ble%ing to answer questions 15-18 The Sumshine Corporation eds that ins c

Question

5e the ble%ing to answer questions 15-18 The Sumshine Corporation eds that ins costs information·' hange with output as shown in the accompanying table Use this are 540 when it produces no out pua so so answer the following question s) so 65 sS 15. fer to the above information. The total cost of producing 3 units of output is. )$65 C) $145. D) S185 S105 Refer to the above information. The average total cost of 3 units of output is A) $65 16. B) $21.67 C) $40 D) $35. 17. Refer to the above information. The average fixed cost of 3 units of output is 6) s13.33 B) $12.50 C) S40 D) $18.50 Refer to the above information. The marginal cost of the third unit of output is A) $105 B) $25 C) $15 D) S20 18.

Explanation / Answer

15 ) The total cost of producing 3 units of output is: $105

.Total cost = Fixed cost +variable cost

Fixed cost is provided as 40 and for 3 units variable cost provided is 65 so totalling it would give 40+65 = 105

16) The average total cost of 3 units of output is: $35

Average cost = total cost/ no of units. total cost calculated above is 105 USD

so dividing it by no. of units that is 3 = 105/3 = 35

17) The average fixed cost of 3 units of output is: $13.33

Average fixed cost = Total fixed cost / no of units

Total fixed cost provided is 40 $ and no of units is 3

so Average fixed cost for 3 units is =40/3 = 13.33

18). The marginal cost of the third unit of output is: $15

Marginal cost would be difference of 3 unit and second unit that is 65-50 = 15

Since fixed cost for both 2 and 3 unit is same we could always use Variable cost to calculate Marginal cost

Best of luck and let me know ! :-)

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