Consequently, the linear equation y=3x+50 connecting the total cost to the quantity produced.
<h3>What are Manufacturing Costs?</h3>
The manufacturing cost is the sum of all expenses incurred in the production of a good. The three categories of cost of manufacturing are direct costs of material, direct labor, & manufacturing overhead. It affects the overall cost of delivery. The costs directly associated with creating the product are known as manufacturing costs. The per-item cost of doing business must be calculated taking into account both production costs and manufacturing costs.
<h3>Why is manufacturing cost important?</h3>
Costs of production have a significant impact on the efficient design and production of a product. The added value model states that a profit can only be made when the cost of production is less than the value added. Therefore, a product's success depends on knowing how much it will cost to design and manufacture.
<h3>Briefing:</h3>
A linear equation is of the form
y = mx+b
where b is the value at x=0 and m is the slope (rate of change of y with respect to x).
With the information provided, the price rose by $650-$350=$300 when the quantity produced rose by 200-100=100. Therefore, 300/100=3 represents the rate of change of cost (y) in relation to x (number of units).
So the equation is of the form
y = 3x+b
To calculate b, choose one of the two available data points.
When 100 units were produced, the total cost was $350:
350 = 3(100)+b
350 = 300+b
b = 50
The equation y=3x+50, which connects the total cost to the quantity produced, provides the right answer.
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