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2 years ago

11

BMC is considering upgrading the sound systems in their theaters so that their patrons can get the full experience from surround

sound movies. They discovered that upgrade costs at locations with 12 screens were $170,000 but were $110,000 at locations with six screens. What are the fixed costs of upgrading at a location? What are the marginal costs of upgrading another screen at a location? Hint: TC = FC + VC.

1 answer:

Luda [366]2 years ago

6 0

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

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Explanation:

The complete question would be:

<em>You are going into the business of making pizzas. The following is the list of ingredients to make ONE pizza: </em>

<em>400 g flour 50 mL water </em>

<em>10 g yeast 120 g sauce </em>

<em>250 g cheese 5 g oregano </em>

<em>5 g basil </em>

<em>Your business has purchased 500 pizza pans, 60 kg of sauce, 100 kg of cheese, 2.5 kg of basil, 2.5 kg of oregano, 5 kg of yeast, and 200 kg of flour. You have as much water as you need. How many pizzas can you make? </em>

You are going to have to make a couple of conversions to do this. Since everything you need is indicated in grams, we first need to convert everything you have in grams.

There are 1,000 g in 1 kg. So now we convert them all:

60 kg of sauce

$60kg \times \dfrac{1,000g}{1kg} = 60,000g$

100 kg of cheese

$100kg \times \dfrac{1,000g}{1kg} = 100,000g$

2.5 kg of basil

$2.5kg \times \dfrac{1,000g}{1kg} = 2,500g$

2.5 kg of oregano

$2.5kg \times \dfrac{1,000g}{1kg} = 2,500g$

5 kg of yeast

$5kg \times \dfrac{1,000g}{1kg} = 5,000g$

200 kg of flour

$200kg \times \dfrac{1,000g}{1kg} = 200,000g$

So now that we know what we have, we determine how many pizzas we can make with the amount of each ingredient. We get the ratio of each ingredient to one pizza to determine how many we can make:

<u>Flour:</u>

Available: 200,000g

Needed: 400g

$200,000g\ of\ flour\times\dfrac{1\ pizza}{400g\ of\ flour} = 500\ pizzas$

<u>Yeast:</u>

Available: 5,000g

Needed: 10g

$5,000g\ of\ yeast\times\dfrac{1\ pizza}{10g\ of\ yeast} = 500\ pizzas$

<u>Cheese:</u>

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Needed: 250g

$100,000g\ of\ cheese\times\dfrac{1\ pizza}{250g\ of\ cheese} = 400\ pizzas$

<u>Basil:</u>

Available: 2,500g

Needed: 5g

<u /> $2,500g\ of\ basil\times\dfrac{1\ pizza}{5g\ of\ yeast} = 500\ pizzas$ <u />

<u>Sauce:</u>

Available: 60,000g

Needed: 120g

<u /> $60,000g\ of\ sauce\times\dfrac{1\ pizza}{120g\ of\ sauce} = 500\ pizzas$ <u />

<u>Oregano:</u>

Available: 2,500g

Needed: 5g

<u /> $2,500g\ of\ oregano\times\dfrac{1\ pizza}{5g\ of\ oregano} = 500\ pizzas$ <u />

We do not need to consider water, because it will provide as many as we will need.

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