For February, the cost components of a picture frame include $0.25 for the glass, $.65 for the wooden frame, and $0.80 for assembly.The assembly desk and tools cost $400.1,000 frames are expected to be produced in the coming year.What cost function best represents these costs?
A)y = 1.70 + 400X
B)y = 400 + 1.70X
C)y = 2.10 + 1,000X
D)y = .90 + 400X
E)y = 400 + 0.90X

Question

Quizplus · Accepted Answer

The cost function should include both fixed costs and variable costs. The fixed costs are the assembly desk and tools costing $400, which do not vary with the number of frames produced. The variable costs include the costs per frame, which are 0.25 for glass, 0.65 for the wooden frame, and 0.80 for assembly. Therefore, the cost function can be expressed as:
y = fixed cost + variable cost per unit * number of units produced
Substituting the values given in the question, we get:
y = 400 + (0.25 + 0.65 + 0.80) * X
Simplifying, we get:
y = 400 + 1.70X
Therefore, the best choice is B.

For February, the Cost Components of a Picture Frame Include