Asked by Juanita Soriano on Jul 30, 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 2 mixers and bakes 400 cakes per day,what is her average total cost?
A) $0.02
B) $10.75
C) $500
D) $1,507
Average Total Cost
The aggregate expenditure involved in producing goods, spread over the volume of items produced, incorporating static and dynamic costs.
Mixers
Devices used for blending or mixing substances together in various industries or culinary processes.
Bakes
Refers to the process of cooking food by dry heat, typically in an oven.
- Evaluate and determine the average fixed, variable, and cumulative costs.
- Analyze the relationship between the amount of production and cost figures.
Verified Answer
AM
aaliyah mogajiAug 01, 2024
Final Answer :
B
Explanation :
From the table, we can see that when Pat purchases 2 mixers, the average total cost is $10.75 per cake. So if she bakes 400 cakes per day, her total cost would be $4,300 (400*$10.75). Therefore, the best choice for Pat would be to purchase 2 mixers.
Learning Objectives
- Evaluate and determine the average fixed, variable, and cumulative costs.
- Analyze the relationship between the amount of production and cost figures.