Using below please answers the following questions, A foreign distributor offers to buy 50 calculators per week from AM over a one-month period, to be marketed under a different brand name.The distributor offers a price of $10 per calculator.Should AM accept the offer?What is the least price AM should accept for this kind of arrangement?

AM Instrument Company manufactures miniature calculators, which it sells to a limited number of exclusive dealers.AM's normal production rate is 260 units per week at a total cost of $3,200.At full capacity it can produce 340 units per week at a total cost of $3,800.

What is the average cost per calculator under normal operating conditions?

$3200/260 = $12.31 rounded

What is the average variable cost per calculator?

x = 3200 - 260y + 340y = 3800

3800 - 3200 = 600

340 - 260y = 80y

3800 - 3200 = 600

80Y= 600

Y = $7.5 (Variable cost per calculator)

What is the total fixed cost?

3200 - 260(7.5) = $1250 Fixed Cost

What is the average fixed cost per calculator under normal operating conditions?

1250 / 260 = $4.81