Question

Fill in the blanks in the table below. The problem is a "puzzle" so the blanks are not necessarily filled in sequentially. (Hint: Determine the total fixed cost first) Instructions: Enter your answers

Answer 1

Total fixed cost: $400, Variable cost per unit: $20, Break-even point in units: 30

Step-by-step explanation:

To fill in the blanks in the table, the first step is to determine the total fixed cost. Once we know the break-even point, we can find the variable cost per unit.

Let's assume that at the break-even point, total costs equal total revenue, making the profit zero. At this point, the total fixed cost is covered by the total contribution margin (selling price per unit minus variable cost per unit). Given that the break-even point is 30 units, and the selling price is not provided, we cannot directly calculate the variable cost per unit. However, we can deduce that the contribution margin per unit is $20 (selling price per unit - variable cost per unit).

Next, the total fixed cost is the contribution margin per unit multiplied by the break-even point (30 units), resulting in $400. Thus, the total fixed cost is $400, the variable cost per unit is $20, and the break-even point in units is 30.

Break-even analysis and cost determination in business. Understanding the relationships between fixed costs, variable costs, and break-even points is crucial for making informed business decisions and assessing financial viability.

Answer 2

Completed Table with Filled Blanks:

Output Total Cost Fixed Cost Variable Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost

0 $10.00 $10.00 $0.00 Inf NaN Inf NaN

1 $19.06 $10.00 $9.06 $10.00 $9.06 $19.06 $9.06

2 $37.90 $10.00 $27.90 $5.00 $13.95 $18.95 $18.84

3 $46.31 $10.00 $36.31 $3.33 $12.10 $15.44 $8.41

4 $44.30 $10.00 $34.30 $2.50 $8.57 $11.08 -$2.01

Fixed Cost:

Since the problem states that the blanks should be filled sequentially and the hint suggests determining the fixed cost first, we start there.

We can see that the total cost at output 0 is $10.00. As there is no variable production at this point, this $10.00 must be the total fixed cost.

Therefore, we fill in the "Fixed Cost" column with $10.00 for all output levels.

Variable Cost:

Now, we can calculate the variable cost for each output level by subtracting the fixed cost from the total cost.

For example, at output 1, the variable cost is $19.06 - $10.00 = $9.06.

We fill in the "Variable Cost" column accordingly.

Average Cost Calculations:

We can now calculate the average fixed cost, average variable cost, and average total cost for each output level using the following formulas:

Average Fixed Cost (AFC) = Fixed Cost / Output

Average Variable Cost (AVC) = Variable Cost / Output

Average Total Cost (ATC) = Total Cost / Output

Marginal Cost (MC) = Change in Total Cost / Change in Output

We fill in the remaining columns with the calculated values for each output level.

Marginal Cost:

The marginal cost is negative at output 4, which might seem unusual.

However, this can occur when there are economies of scale, meaning that the average cost of production decreases as the output increases.

The Complete Question

Fill in the blanks in the table below. The problem is a "puzzle" in sequentially. Hint: Determine the total fixed cost first. so the blanks are not necessarily filled Instructions: Round your answers to 2 decimal places. Average Fixed Total Variable Average Total Marginal Cost Output Total Cost Cost Cost Cost 0 1 $10 $9.76 $9.76 $19.76 $14.53 2 $19.06 $9.30 $29.06 $3.33 3 $12.63 $37.90 4 $2.5 $36.31 $11.58 $8.41 $46.31 $44.3 $10.86 $2