Question

​Vipsana's Gyros House sells gyros. The cost of ingredients​ (pita, meat,​ spices, etc.) to make a gyro is​ $2.00. Vipsana pays her employees​ $60 per day. She also incurs a fixed cost of​ $120 per day. Calculate​ Vipsana's average fixed cost per gyro when she produces 50 gyros using two​ workers?

Answer 1

The average fixed cost is $2.4.

Step-by-step explanation:

Vipsana's Gyros House sells gyros.

The cost of ingredients​ to make a gyro is​ $2.00.

Vipsana pays her employees​ $60 per day.

She also incurs a fixed cost of​ $120 per day.

The cost incurred on ingredients and workers is a variable cost.

The total fixed is thus $120.

The average fixed cost for 50 gyros

=
`(TFC)/(Q)`

=
`(120)/(50)`

= $2.4