Answer:
Fixed cost = $50,000
Marginal costs= $10,000
Explanation:
The costs of upgrading 12 screens = $170,000
The cost of upgrading 6 screens = $110,000
The difference between 12 screens At $170,000 and 6 screens at $110,000 represents the variable cost of 6 screens (12 - 6)
=$170,000 - $110,000 = 60,000
Variable costs for 6 screens = $60,000
Variable costs per screen = $60,000/ 6
=$10,000
Its cost $170,000 to upgrade 12 screens. variable costs per screen = $10,000
Fixed costs = $170,000 -( $10,000 x 12)
Fixed costs= $170,000 -$120,000
Fixed costs= $50,000
Marginal cost is the cost of upgrading one more screen, which is equivalent to variable costs for one screen
=$10,000
