Exhibit 6-8 Cost schedule for producing pizzas

-By filling in the blanks in Exhibit 6-8,the AFC of 3 pizzas is shown to be equal to:

Question

Exhibit 6-8 Cost schedule for producing pizzas
 
-By filling in the blanks in Exhibit 6-8,the AFC of 3 pizzas is shown to be equal to:

Quizplus · Accepted Answer

To calculate AFC (average fixed cost), we need to divide the total fixed cost by the quantity produced. From the table in Exhibit 6-8, we can see that the total fixed cost is $40.00 (for rent, utilities, etc.) and the total variable cost for 3 pizzas is $20.00.

To find AFC for 3 pizzas, we need to subtract the variable cost for 3 pizzas ($10.00) from the total cost ($60.00) and then divide by the quantity of 3 pizzas.

($60.00 - $20.00)/3 = $40.00/3 = $13.33

Therefore, the AFC of 3 pizzas is $13.33.

The best choice is C, as it is the only option that matches the calculated AFC.

Exhibit 6-8 Cost Schedule for Producing Pizzas