Question

If the company produces 2,300 units in August, what is its expected total cost?

A. ( $ 27,600 )
B. ( $ 35,600 )
C. ( $ 39,600 )
D. ( $ 8,000)

Answer 1

The expected total cost for producing 2,300 units in August is $2,185,000.

Step-by-step explanation:

To find the expected total cost, we need to calculate the total cost per unit. The company has fixed costs of $250 and marginal costs for each unit. From the given information, we can determine the total cost for each unit:
1st unit: $700 + $250 = $950
2nd unit: $250 + $300 = $550
3rd unit: $300 + $350 = $650
4th unit: $350 + $400 = $750
5th unit: $400 + $450 = $850
6th unit: $450 + $500 = $950
7th unit: $500
Now, we can find the total cost for 2,300 units by multiplying the total cost per unit by the number of units produced:
2,300 * $950 = $2,185,000
Therefore, the expected total cost for producing 2,300 units in August is $2,185,000.