In the above figure,what is the TOTAL cost of producing 5 units of output?
A)$10
B)$60
C)$100
D)$225
E)$2,000

Question

In the above figure,what is the TOTAL cost of producing 5 units of output?
A)$10 
B)$60 
C)$100 
D)$225 
E)$2,000

Quizplus · Accepted Answer

To produce 1 unit of output, the cost includes $10 for labor, $15 for materials, and $5 for overhead, making a total cost of $30. Therefore, to produce 5 units, the total cost would be:
($10+$15+$5) x 5 = $30 x 5 = $150
However, there is an additional cost of $50 for setup, which is incurred only once regardless of the number of units produced. Therefore, the total cost of producing 5 units would be $150 + $50 = $200. The closest answer choice is C, which is $100 off from the calculated value, so the answer is C.

In the Above Figure,what Is the TOTAL Cost of Producing