Q3

a. ABC Company produces 100 pendants per day. The total fixed cost for the plant is $5000 and the total variable cost is $15000 per day. Calculate the average fixed cost, average variable cost, average total cost and total cost at the current output level.

b. Calculate Economic profit and Accounting profit from the figures given below for ABC Company.

Total revenue$ 500,000

Wages and salaries$ 40,0000

Forgone salary$80,000

Interest paid$10,000

Forgone rent$10,000

Raw materials$50,000

Other payments$20,000

Forgone interest$7,000