10.
|
Situation 22-1 |
| Diane's Donuts will begin selling donuts next week. Diane figures that the average variable cost to make each donut will be constant at $0.30. She has already paid $20,000 for the donut-making machinery and one year's rent. |
Refer to Situation 22-l. What will Diane's approximate average fixed costs be if she sells 36,500 donuts in one year?
| a. |
$0.088 |
|
| b. |
$0.30 |
|
| c. |
$0.138 |
|
| d. |
$0.55 |
Answer
Average fixed cost =fixed cost /output
fixed cost =the cost of rent and machinary=$20000
average fixed cost=20000/36500
=0.547945205
=$0.55
the AFC is $0.55
Option d
10. Situation 22-1 Diane's Donuts will begin selling donuts next week. Diane figures that the average...