Question

A lawn mower manufacturer incurs a total of 34,816 in overhead costs and 388 per lawn mower in production costs. How many lawn mowers were manufactured if the average cost of productions is 660

Answer 1

128 lawn mowers were manufactured.

Explanation:

Let's call z the number of manufactured lawn mowers

The general expenses are: $ 34 816

The costs per lawn mower are $388(z)

We know that:

Total cost (c) = Variable cost + fixed cost

So

`c = \$388(z) + \$34\ 816`

The average cost of production Cp is equal to c/z

So:

`Cp = (388(z) + 34816)/(z)\\\\Cp = 388 + (34816)/(z)`

We know that Cp = 660.

Finally:

`660 = 388 + (34816)/(z)\\\\z = (34816)/(272)\\\\z = 128`