Fixed, Variable, Average, and Marginal Costs 1: A new machine comes with 300 free service hours over the rst year. Additional time costs $200 per hour. What are the average and marginal costs per hour for the following quantities? (a) average cost for the first 225 hours of service <2 pts> Reasoning/Work: (b) marginal cost for the first 225 hours of service <2 pts> Reasoning/Work: (c) average cost for the first 350 hours of service <2 pts> Reasoning/Work: (d) marginal cost for the first 350 hours of service <2 pts> Reasoning/Work: (e) average cost for the first 500 hours of service <2 pts> Reasoning/Work: (f) marginal cost for the first 500 hours of service <2 pts> Reasoning/Work: 2: Consider the breakeven graph below for an investment and answer the following questions. Note that the vertical axis numbers are multiplied by 10,000: (a) What is the "breakeven" number of units per year? < 6 pts> Reasoning/Work: (b) If you sell 1500 units this year, will you have a prot or loss? How much? <4 pts> Reasoning/Work: (c) At 1500 units, what is your average cost? <3 pts> Reasoning/Work: (d) At 1500 units, what is your marginal cost? <3 pts> Reasoning/Work: Segmenting Models 3: You and your spouse are planning a second honeymoon to the Cayman Islands this summer and would like to have your house painted while you are away. Estimate the total cost of the paint job from the information given below, where: <13 pts> Costtotal = Costpaint + Costlabor + Costxed Paint information: Your house has a painted surface area of 4000 ft2. One can of paint can cover 400 ft2. You are estimating the cost to put on two coats of paint for the entire house. Number of Cans Purchased Cost per Can First 10 cans purchased $32.50 Then next 5 cans purchased $25.50 Then up to next 10 cans purchased $20 _ Labor information: You plan to hire ve painters who will paint for 8 hours per day each. You estimate that the job will require 5.5 days of their painting time. The painter's rate is $25 per hour. Fixed cost information: The painting company charges $1000 per job to cover travel expenses, clothing, cloths, thinner, administration, and so on. Reasoning: Indexes and Sizing Models 4: Your boss is the director of reporting for the Athens County Construction Agency (ACCA). It has been his job to track the cost of construction in Athens County. Twenty years ago, he created the ACCA Cost Index to track these costs. Costs during the rst year of the index were $8per square foot of constructed space (the index value was set at 100 for that rst year). This past year a survey of contractors revealed that costs were $120 per square foot. What index number will your boss publish in his report for this year? <2 pts> Indexthis past year: Reasoning/Work: However, if we are told instead that the index value was 925 last year, what was the cost per square foot last year? <2 pts> (b) Costlast year: Reasoning/Work: Learning-Curve Models 5: A new product needs 60 labor hours to complete the build for the rst unit. If production operates at a 80% learning curve rate, calculate the average labor hours (rounded to the closest hundredth hour, e.g. 34.47 hours) required per unit to produce six units. Note that after calculating the exponent "b" in Equation 2-5, round "b" to the fifth decimal place (e.g., -0.73468) and then use "b" in Equation 2-4. <5 pts> Reasoning/Work