-The above table shows the total product schedule for the campus book store. If each employee is paid $12 per hour, what is the average variable cost of selling 83 books per hour (assuming labor costs are the only variable costs of production)?
A) $0.86 per book
B) $0.14 per book
C) $4.60 per book
D) $12.00 per book

Question

-The above table shows the total product schedule for the campus book store. If each employee is paid $12 per hour, what is the average variable cost of selling 83 books per hour (assuming labor costs are the only variable costs of production)?
A) $0.86 per book 
B) $0.14 per book 
C) $4.60 per book 
D) $12.00 per book

Quizplus · Accepted Answer

To find the average variable cost (AVC), we need to calculate the total variable cost (TVC) and divide it by the quantity of output. If labor is the only variable cost, and each employee is paid $12 per hour, we need to determine how many employees are needed to sell 83 books per hour. From the table, if 83 books are sold, let's assume it requires 7 employees (as an example). The TVC would be 7 employees * $12 = $84. The AVC is then $84 / 83 books = $1.01 per book. However, since the closest option is $0.86, it suggests a different number of employees might be used in the table, but $0.86 is the closest choice.

-The Above Table Shows the Total Product Schedule for the Campus