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2 years ago

Manufacturing companies usually have two types of costs.

Business

1 answer:

Ostrovityanka [42]2 years ago

8 0

Answer:

(A) 2,140 + 540x

(B) $27,520

(C) $540

Explanation:

Given that,

Fixed cost = $2,140 per month

Total cost to manufacture 21 bikes = $13,480

Variable cost for manufacturing 21 bikes:

= Total cost - Fixed cost

= $13,480 - $2,140

= $11,340

Variable cost for each bike:

= Total variable cost ÷ No. of bikes manufacture

= $11,340 ÷ 21

= $540 per bike

Let the number of bikes manufacture be x

(A) The cost function is as follows:

= Fixed cost + Variable cost

= 2,140 + 540x

(B) The total cost to manufacture 47 bikes:

= Fixed cost + Variable cost

= $2,140 + ($540 × 47)

= $2,140 + $25,380

= $27,520

= Variable cost for each bike

= $540

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