Answer:
The average cost per missile that Merowak could bid for the contract is $3,501 per missile
Explanation:
To compute the average cost per missile, we need to apply the formula which is shown below:
The Average cost per missile = Total cost ÷ Quantity
where,
Total cost = Fixed cost + variable cost
The fixed cost is computed by
= $1,000 million + $500 million + $1 million
= $1,501 million
Since the value is given in billion so we converted into million.
And, the variable cost = Marginal cost × floor space cost
= $2,000 × $1 million
= $2,000
So, the total cost = $1,501 million + $2,000 million = $3,501 million
Now put these values to the above formula
So, the value would equal to
= $3,501 ÷ 1 million
= $3,501 per missile
