Question
1. FirmXYZis currentlyproducing 50units ofoutput atan average costof $18.Customer Aiswilling to offer Firm XYZ $220 to produce 5 more additional units. Firm XYZ's averagevariable cost
1. FirmXYZis currentlyproducing 50units ofoutput atan average costof $18.Customer Aiswilling to offer Firm XYZ $220 to produce 5 more additional units. Firm XYZ's averagevariable cost and average fixed cost of producing 55 units is $20 and $2. Should Firm XYZaccepttheoffer?
2. Youaregiven thefollowingcostand revenueinformationforCindy'sCandles,aperfectlycompetitivefirm at its current level of output.
AFC=4
ATC=10
TVC=600
MC=10
TR = 1,200
a. Whatisthe amount ofprofitorloss?
b. Isthefirmproducingatitsoptimallevel?Ifnot,shoulditincreaseordecreaseoutput?
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
15th edition
978-0133428858, 133428850, 133428702, 978-0133428704
