Question

The cost components of a heater include $35 for the compressor, $11 for the sheet molded compound frame, and $74 per unit for assembly. The factory machines and tools cost is $55,000. The company expects to produce 1,300 heaters in the coming year. What cost function best represents these costs

Answer 1

Total cost= 120x + 55,000

x= nuber of units

Step-by-step explanation:

Giving the following information:

Variable costs::

Compressor= $35

sheet molded compound frame= $11

assembly= $74

Total= $120

The factory machines and tools cost is $55,000.

We need to structure the total cost formula.

Total cost= total variable cost + total fixed costs

Total cost= 120x + 55,000

x= nuber of units

In this case:

Total cost= 120*1,300 + 55,000= $211,000