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1 year ago

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Mathematics

1 answer:

kap26 [50]1 year ago

3 0

b. Total fixed cost are $49885

<h3>What is fixed cost of product ?</h3>

Sometimes production of a product may increase or decrease, but the cost which do not change with the change of output is called fixed cost of the product.

<h3>What is the total fixed cost ?</h3>

Highest monthly total cost = $83800

Highest monthly production units = 3500 desks

Lowest monthly total cost = $61900

Lowset monthly production units = 1240 desks

So, variable cost per unit = (Highest cost-lower cost)/(highest production units-lowest production units)

= ($83800-$61900)/(3500-1240)

= $21900/2260

= $9.7

∴ Total fixed costs=Highest monthly total cost-(highest production units×variable cost per unit)

= $83800-(3500×$9.7)

= $83800-$33950

= $49850

Nearest value is $49885, whch is the correct one.

Learn more about fixed cost here:

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