Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In a slow year, Deutsche Burgers will produce 4 million hamburgers at a total cost of $4.9 million. In a good year, it can produce

In a slow year, Deutsche Burgers will produce 4 million hamburgers at a total cost of $4.9 million. In a good year, it can produce 4.6 million hamburgers at a total cost of $5.2 million.

What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)

b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What is the average cost per burger when the firm produces 2 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

e. Why is the average cost lower when more burgers are produced?

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

International Financial Reporting Standards An Introduction

Authors: Belverd E. Needles, Marian Powers

3rd Edition

1133187943, 978-1133187943

More Books

Students also viewed these Finance questions