Question

Erasemo Inc. manufactures erasers. The fixed costs for setting up the machines and rent are $475.00. The variable cost is per $0.14 eraser.

Write a cost function for Erasemo Inc.

Answer 1

The cost function for Erasemo Inc., which manufactures erasers, is C(x) = $475.00 + ($0.14 × x), where C(x) represents the total cost and x is the number of erasers produced.

Step-by-step explanation:

To write a cost function for Erasemo Inc., we must incorporate both the fixed costs and the variable costs associated with production. The fixed costs, which include machine setup and rent, are constant at $475.00, regardless of the number of erasers produced. The variable cost is $0.14 per eraser, and this cost increases with each additional eraser produced.

The cost function, C(x), where x represents the number of erasers produced, can be expressed as:

C(x) = Fixed Costs + (Variable Cost per Eraser × Number of Erasers Produced)

Plugging in the provided values gives us the following formula:

C(x) = $475.00 + ($0.14 × x)

This equation allows us to calculate the total cost of production for any quantity of erasers manufactured by Erasemo Inc.