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Tesla is assessing the costs of producing a new electric vehicle model. The fixed production costs are $300,000,000, and the variable costs are $25,000 per

Tesla is assessing the costs of producing a new electric vehicle model. The fixed production costs are $300,000,000, and the variable costs are $25,000 per vehicle. Tesla expects to produce 10,000 vehicles in the first year. Additionally, battery costs per vehicle are $10,000.

Requirements:

  • Calculate the total production costs for the first year, including battery costs.
  • Determine the cost per vehicle.
  • Analyze the effect of producing 2,000 additional vehicles on total and per-vehicle costs.
  • Discuss the significance of managing battery costs in EV production.
  • Recommend strategies for cost control in vehicle manufacturing.

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