The St. Jones Winery plans to open a new production facility in the Conila Valley of Puerto Rico. Based

on the information provided by the accounting department, the company estimates the fixed costs of

RM360,000 per year and the function of average variable costs as AVC = RM15 + RM0.02Q where AVC

is average variable cost (in Ringgit Malaysia) and Q is output measured in cases per year.

1. Estimate total costs and average total costs for the coming year at a projected volume of 2,500

cases.