Question

Let's try to determine the cost function for another company like ABC who makes sausages. Assume costs are as follows:

Answer 1

Answer:

$3.30 per pound

Explanation:

The computation of the variable cost portion of their cost formula is shown below:

= Product cost + wages + utilities cost

= $1.15 per pound + $1.95 per pound + $0.20 per pound

= $3.30 per pound

The above cost i.e product cost, wages, and the utilities cost are terms as the variable cost portion so all these three would be considered and others are ignored