Question

In a slow year, Deutsche Burgers will produce 3.200 million hamburgers at a total cost of...

In a slow year, Deutsche Burgers will produce 3.200 million hamburgers at a total cost of $5.400 million. In a good year, it can produce 5.400 million hamburgers at a total cost of $6.100 million.

a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.)

b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. What is the average cost per burger when the firm produces 2 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

d. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

e. Why is the average cost lower when more burgers are produced?

The fixed costs are spread across more burgers.

Variable costs are lower per burger.

Fixed costs are constant per burger.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:

variable cost per hamburger = Change in total cost / Change in quantity produced

= ($6.100 million - $5.400 million) / (5.400 million - 3.200 million)

= $0.7 million / 2.2 million

= $0.32

fixed costs of hamburger production = $5.400 million - (3.200 million * $0.32)

= $5.400 million - $1.024 million

= $4.38 million

a) fixed costs of hamburger production = $4.38 million

b) variable cost per hamburger = $0.32

c) average cost per burger when the firm produces 2 million hamburgers = Total cost / 2 million

= $5.02 million / 2 million

= $2.51

Total cost = $4.38 million + ($0.32 * 2 million)

= $4.38 million + 0.64 million

= $5.02 million

d) average cost per burger when the firm produces 3 million hamburgers = Total cost / 3 million

= $5.34 million / 3 million

= $1.78

Total cost = $4.38 million + ($0.32 * 3 million)

= $4.38 million + 0.96 million

= $5.34 million

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In a slow year, Deutsche Burgers will produce 2.000 million hamburgers at a total cost of...
In a slow year, Deutsche Burgers will produce 2.000 million hamburgers at a total cost of $3.600 million. In a good year, it can produce 4.500 million hamburgers at a total cost of $5.100 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c....
In a slow year, Deutsche Burgers will produce 2.8 million hamburgers at a total cost of...
In a slow year, Deutsche Burgers will produce 2.8 million hamburgers at a total cost of $4.2 million. In a good year, it can produce 5.3 million hamburgers at a total cost of $6 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c....
In a slow year, Deutsche Burgers will produce 2.900 million hamburgers at a total cost of...
In a slow year, Deutsche Burgers will produce 2.900 million hamburgers at a total cost of $4.300 million. In a good year, it can produce 4.900 million hamburgers at a total cost of $5.500 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 1 decimal place.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c....
In a slow year, Deutsche Burgers will produce 2.800 million hamburgers at a total cost of...
In a slow year, Deutsche Burgers will produce 2.800 million hamburgers at a total cost of $3.400 million. In a good year, it can produce 4.800 million hamburgers at a total cost of $4.600 million . a. What is the average cost per burger when the firm produces 2 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not...
Until​ recently, hamburgers at the city sports arena cost ​$3.20 each. The food concessionaire sold an...
Until​ recently, hamburgers at the city sports arena cost ​$3.20 each. The food concessionaire sold an average of 18,000 hamburgers on game night. When the price was raised to $3.80, hamburger sales dropped off to an average of 12,000 per night. ​(a) Assuming a linear demand​ curve, find the price of a hamburger that will maximize the nightly hamburger revenue. ​(b) If the concessionaire had fixed costs of 2,000 per night and the variable cost is ​$0.40 per​ hamburger, find...
Until recently, the hamburgers at the city sports arena cost $4.60 each. The concessionaire sold an...
Until recently, the hamburgers at the city sports arena cost $4.60 each. The concessionaire sold an average of 6,000 on game night. When the price was raised up to $5.10, the hamburger sales dropped to an average of 4750 per night. ​(a) Assuming a linear demand​ curve, find the price of a hamburger that will maximize the nightly hamburger revenue. ​(b) If the concessionaire had fixed costs of ​$2,500 per night and the variable cost is ​$0.50 per​ hamburger, find...
Until​ recently, hamburgers at the city sports arena cost $ 2.50$2.50 each. The food concessionaire sold...
Until​ recently, hamburgers at the city sports arena cost $ 2.50$2.50 each. The food concessionaire sold an average of 2 comma 5002,500 hamburgers on game night. When the price was raised to $ 2.80$2.80​, hamburger sales dropped off to an average of 2 comma 2002,200 per night. The​ concessionaire's fixed costs were ​$566.40566.40 per night and the variable cost was ​$1.301.30 per hamburger. a)Assume that the relationship between price p and demand x is linear. Express p as a function...
Bob’s Burgers is considering a project with an initial cost of $8 million that would produce...
Bob’s Burgers is considering a project with an initial cost of $8 million that would produce cash flows of $1.5 million the first year, $2 million the second, and $2.5 million per year for the final two years. If the required return is 11.3%, should Bob do the project?
Hatter, Inc., has equity with a market value of $23.1 million and debt with a market...
Hatter, Inc., has equity with a market value of $23.1 million and debt with a market value of $9.24 million. The cost of debt is 10 percent per year. Treasury bills that mature in one year yield 6 percent per year, and the expected return on the market portfolio over the next year is 11 percent. The beta of the company’s equity is 1.16. The firm pays no taxes. a. What is the company’s debt−equity ratio? (Do not round intermediate...
Until​ recently, hamburgers at the city sports arena cost $ 2.50 each. The food concessionaire sold...
Until​ recently, hamburgers at the city sports arena cost $ 2.50 each. The food concessionaire sold an average of 2,500 hamburgers on game night. When the price was raised to $2.80​, hamburger sales dropped off to an average of 2,200 per night. The​ concessionaire's fixed costs were ​$1,156.50 per night and the variable cost was $1.98 per hamburger. Answer the following questions​ (A) through​ (F). (A)   Assume that the relationship between price p and demand x is linear. Express p...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT