Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In a slow year, Deutsche Burgers will produce 2 million hamburgers at a total cost of $ 3 . 5 million. In a good year,

In a slow year, Deutsche Burgers will produce 2 million hamburgers at a total cost of $3.5 million. In a good year, it can produce 4 million hamburgers at a total cost of $4.5 million.
a. What are the fixed costs of hamburger production?
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.
b. What is the variable cost per hamburger?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
c. What is the average cost per burger when the firm produces 1 million hamburgers?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
d. What is the average cost per burger when the firm produces 2 million hamburgers?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
e. Why is the average cost lower when more burgers are produced?
\table[[a. Fixed cost,million,],[b. Variable cost,,per burger],[c. Average cost,per burger,],[d. Average cost,per burger,],[e. Why is the average cost lower when more burgers are produced?,,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Chad Zutter, Scott Smart

16th Global Edition

1292400641, 978-1292400648

More Books

Students also viewed these Finance questions