QuestionFind the linear cost function given a fixed cost of \$300 and that producing 60 items costs \$3,300.
Studdy Solution
STEP 1
Assumptions1. The situation can be expressed as a linear cost function.
. The fixed cost is 3,300.
4. The cost function is of the form , where is the variable cost per item and is the fixed cost.
STEP 2
First, we need to find the variable cost per item. This can be found by subtracting the fixed cost from the total cost and then dividing by the number of items.
STEP 3
Now, plug in the given values for the total cost, fixed cost, and number of items to calculate the variable cost per item.
STEP 4
Calculate the variable cost per item.
STEP 5
Now that we have the variable cost per item, we can write the cost function. The cost function is of the form , where is the variable cost per item and is the fixed cost.
STEP 6
Plug in the values for the variable cost per item and the fixed cost to write the cost function.
The cost function is .
Was this helpful?