Question

Table 13-11 measures of cost for very brady poster factory quantity of posters variable costs total costs fixed costs 0 $10 1 $1 2 $3 $13 3 $6 $16 4 $10 5 $25 6 $21 $10 refer to table 13-11. what is the variable cost of producing 5 posters?

Answer 1

Given the table below which measures the cost for Very Brady Poster Factory


`\begin{tabular} \multicolumn{4}{Measures of Cost for Very Brady Poster Factory}\\[1ex]Quantity of Posters&Variable cost&Total cost&Fixed cost\\[1ex]0&&&\$10\\1&\$1&&\\2&\$3&\$13&\\3&\$6&\$13&\\4&\$10&&\\5&&\$25&\\6&\$21&&\$10 \end{tabular}`

Part A:

From the table, the fixed cost is $10 and the total cost of producing 5 posters is $25.

Therefore, the variable cost of producing 5 posters is given by Total cost - fixed cost = $25 - $10 = $15.



Part B:

The marginal cost is the cost of producing one additional unit of poster.

From the table, the total cost of producing the 6 posters is given by $21 + $10 = $31 and the total cost of producing 5 posters is $25.

Therefore, the marginal cost of producing the 6th poster is given by the total cost of producing 6 posters minus the total cost of producing 5 posters = $31 - $25 = $6.