| 10 T-shirt | $112.67 | |||
| 40 T-shirt | $399.09 | |||
| Differential | 30 T shirt | $286.42 | ||
| (40-10) shirts | (399.09-112.67) | |||
| hence, variable cost per unit = 286.42/30 | ||||
| $9.55 | ||||
| cost breakup of 10 T-shirts | ||||
| Variable cost = 10*9.55 = 95.50 | ||||
| Fixed cost = 112.67-95.47 = 17.17 | ||||
| Cost of producing 100 t-shirts | ||||
| Variable cost | =100*9.55 | |||
| Fixed Cost | =17.20 | |||
| Total cost | $972.20 | |||
| Cost of 1000 items/day | $54,705.00 | |||
| Cost of 5000 items/day | $73,726.00 | |||
| Differential | 4000 items/day | $19,021.00 | ||
| Variable cost per unit | $4.76 | (19021/4000) | ||
| Cost breakup of 1000 items/day | ||||
| Variable cost | $4,755.25 | |||
| Fixed Cost | $49,949.75 | |||
| 10 t-shirt cost | $106.33 | |||
| 40 t-shirt cost | $401.54 | |||
| Differencial | 30 t shirt cost | $295.21 | (401.54-106.33) | |
| Marginal cost per tshirt | $9.84 | (295.21/30) | ||
Total Cost Analysis The manager of a rival T-shirt stand found that her cost to produce...
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