Roger makes short films. After he rents his film equipment for $20,000, he cannot change that decision. It costs him $5,000 per film for editing, location expenses, and other expenses incurred for each film. What is average total cost if he produces 10 films?

Question

Quizplus · Accepted Answer

The total cost includes the fixed cost of renting equipment ($20,000) plus the variable costs of producing 10 films ($5,000 per film * 10 = $50,000), totaling $70,000. The average total cost is this total cost divided by the number of films, which is $70,000 / 10 = $7,000 per film.

Roger Makes Short Films