The Akron Slugger Company produces various types of wooden baseball bats.It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00.If $22,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,her forecast for 8,500 bats will be
A)$10,000.
B)$75,000.
C)$85,000.
D)$82,000.

Question

Quizplus · Accepted Answer

D)
Total Cost = $10 × 7,500 = $75,000
$75,000 = Variable cost per unit (7,500 )+ $22,500
$7.00 = Variable cost per unit
then
Y = $7.00 (8,500)+ $5,500
y = $82,000

The Akron Slugger Company Produces Various Types of Wooden Baseball