ace manufacturing produces 1000 hammers per day the total fixed cost for the pla

Question

ace manufacturing produces 1000 hammers per day the total fixed cost for the plant is 5000 per day and the total variable cost is 15000 per day calculate the average fixed cost average variable cost and the total cost at the current output level ace manufacturing produces 1000 hammers per day the total fixed cost for the plant is 5000 per day and the total variable cost is 15000 per day calculate the average fixed cost average variable cost and the total cost at the current output level ace manufacturing produces 1000 hammers per day the total fixed cost for the plant is 5000 per day and the total variable cost is 15000 per day calculate the average fixed cost average variable cost and the total cost at the current output level

Explanation / Answer

Average Fixed Cost = Fixed Cost/Quantity = 5000/1000 = 5
Average Variable Cost = Variable Cost/Quantity = 15000/1000 = 15
Average Total Cost = Total Cost/Quantity = (Fixed Cost + Variable Cost)/Quantity = Average Fixed Cost + Average Variable Cost = 5 + 15 = 20
Total Cost = Fixed Cost + Variable Cost = 15000 + 5000 = 20000

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