Question

Wister Spinner is another competitor of Faster Fidget. Upon request, Marco received the cost models of their three topselling spinners, where x is the number of spinners of that model produced.

Model A: ( C(x) = 8,037 + 1.72x )
Model B: ( C(x) = 13,054 + 2.18x )
Model C: ( C(x) = 4,088 + 1.89x )

Which two statements are true? Select all the correct answers.

a) Model A has the lowest fixed cost.
b) Model B has the highest fixed cost.
c) Model C has the lowest variable cost.
d) Each additional Model B spinner produced will increase the total cost by 2.18%.
e) Each additional Model A spinner produced will increase the total cost by $1.72.
f) The fixed costs of models A and C combined are greater than the fixed cost of model B.

Answer 1

Model A has the lowest fixed cost and Model C has the lowest variable cost.

Step-by-step explanation:

Let's analyze each statement to determine which ones are true:

1. a) Model A has the lowest fixed cost. We can see from the cost models that Model A has a fixed cost of $8,037. Comparing this to the fixed costs of Models B and C, we can determine that Model A does indeed have the lowest fixed cost.
2. b) Model B has the highest fixed cost. Model B has a fixed cost of $13,054. Comparing this to the fixed costs of Models A and C, we can determine that Model B does have the highest fixed cost.
3. c) Model C has the lowest variable cost. To determine which model has the lowest variable cost, we need to compare the coefficients of the x term in each cost model. Model A has a coefficient of 1.72, Model B has a coefficient of 2.18, and Model C has a coefficient of 1.89. Therefore, Model C has the lowest variable cost.
4. d) Each additional Model B spinner produced will increase the total cost by 2.18%. This statement is not supported by the given information. The coefficient of the x term represents the increase in cost for each additional spinner produced, not the percentage increase.
5. e) Each additional Model A spinner produced will increase the total cost by $1.72. This statement is supported by the given information. The coefficient of the x term in Model A represents the increase in cost for each additional spinner produced, which is $1.72.
6. f) The fixed costs of models A and C combined are greater than the fixed cost of model B. The fixed costs of Models A and C combined would be $8,037 + $4,088 = $12,125. Comparing this to the fixed cost of Model B, we can determine that the fixed costs of Models A and C combined are indeed greater than the fixed cost of Model B.

Based on this analysis, the two true statements are:

• Model A has the lowest fixed cost.
• Model C has the lowest variable cost.