Chloe’s Cafe bakes croissants that it sells to local restaurants and grocery sto

Question

Chloe’s Cafe bakes croissants that it sells to local restaurants and grocery stores. The average costs to bake the croissants are $0.65 for 3,800 and $0.60 for 7,600.

If the total cost function for croissants is linear, what will be the average cost to bake 6,800? (Do not round intermediate calculations. Round your final answer to 4 decimal places.)

If the total cost function for croissants is linear, what will be the average cost to bake 6,800? (Do not round intermediate calculations. Round your final answer to 4 decimal places.)

Explanation / Answer

Unit Variable cost = (3800 X 0.65 - 7600 X 0.60)/(7600-3800) =4560-2470/3800 0.55 per unit Fixed cost = 7600 X(0.60-0.55) or 3800 X(0.65-0.55) $380 Then , At 6800, $380+(0.55 X 6800)= $ 4,120 Average cost = 4,120/6800 0.61 So average cost to bake 6800 uints will be $ 0.61

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