Asked by Daniel Alvarez on May 11, 2024
Verified
(Table: Cakes) Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 400 cakes per day,what is her average total cost?
A) $10.25
B) $12.50
C) $16.50
D) $2,504.00
Average Total Cost
Total production expenses per unit of output, calculated by dividing the production costs by the quantity produced.
Mixers
Devices used to blend or mix ingredients together in cooking or in beverage preparation; also refers to non-alcoholic beverages mixed with alcoholic drinks.
Cakes
Baked goods made from ingredients such as flour, sugar, and eggs, often sweet and served as dessert or for special occasions.
- Ascertain the average fixed, variable, and comprehensive costs with designated data.
Verified Answer
FA
Fahad AlsaroujiMay 15, 2024
Final Answer :
A
Explanation :
The average total cost (ATC) is calculated by adding the average fixed cost (AFC) and the average variable cost (AVC) and then dividing by the quantity of output. Given that Pat purchases 3 mixers and bakes 400 cakes per day, without the specific numbers from the table, we can infer that the correct ATC must be a per-unit cost rather than a total cost figure, making $10.25 the most plausible choice.
Learning Objectives
- Ascertain the average fixed, variable, and comprehensive costs with designated data.