Use the following to answer question:
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average total cost of 2 cakes?
A)$35.00
B)$25.00
C)$17.50
D)$12.50

Question

Use the following to answer question: 
-(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average total cost of 2 cakes?
A)$35.00 
B)$25.00 
C)$17.50 
D)$12.50

Quizplus · Accepted Answer

To calculate the average total cost of 2 cakes, we need to add the average variable cost (AVC) to the fixed cost (FC) and then divide by the number of cakes produced. 
AVC for 2 cakes = ($20 + $30) / 2 = $25
Total cost for 2 cakes = $25 + $10 = $35
Average total cost for 2 cakes = $35 / 2 = $17.50. 
Therefore, the best choice is C.

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