Charlie Shine has written a self-improvement book.The following are its pricing and cost details: $$\begin{array} { l c }
\text { Selling price } & \$ 18.00 \text { per book } \
\text { Variable cost per unit: } & \
\text { Production } & \$ 3.50 \
\text { Selling \& administrative } & 1.90 \
\text { Fixed costs: } & \
\text { Production } & \$ 33,600 \text { per year } \
\text { Selling \& administrative } & 15,540 \text { per year }
\end{array}$$ What is the cost formula for this operation, where TC = Total cost and x = units sold?

Question

Charlie Shine has written a self-improvement book.The following are its pricing and cost details: $$\begin{array} { l c } 
\text { Selling price } & \$ 18.00 \text { per book } \
\text { Variable cost per unit: } & \
\text { Production } & \$ 3.50 \
\text { Selling \& administrative } & 1.90 \
\text { Fixed costs: } & \
\text { Production } & \$ 33,600 \text { per year } \
\text { Selling \& administrative } & 15,540 \text { per year }
\end{array}$$ What is the cost formula for this operation, where TC = Total cost and x = units sold?

Quizplus · Accepted Answer

The total variable cost per unit is the sum of production and selling & administrative variable costs, which is $3.50 + $1.90 = $5.40. The total fixed costs are the sum of production and selling & administrative fixed costs, which is $33,600 + $15,540 = $49,140. Therefore, the cost formula is TC = 5.40x + 49,140, where x is the number of units sold.

Charlie Shine Has Written a Self-Improvement Book What Is the Cost Formula for This Operation, Where TC