Question

A company purchases a copier for $2000 and the material for each order costs $15. a) How many orders must be printed for the average cost per order to fall to $65? (Show Work) b) What happens to the average cost as more orders are printed?​

Answer 1

• a) 40 orders;
• b) Average cost decreases.

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a) Use the following formula:

• average cost = total cost/number of orders

The total cost is the cost of the copier plus the cost of the materials for each order. So, we have:

• 65x = 2000 + 15x, where x is the number of orders.

We can simplify this equation to:

• 2000 = 50x
• x = 40

Hence the average cost per order is $40.

b) As more orders are printed, the average cost per order will decrease because the fixed cost of the copier is spread over a larger number of orders. In other words, the more orders that are printed, the lower the average cost per order will be.