K-Block cooking charts are poster-sized recipes designed to encourage children to cook. The recipe cards are sold in packages of four. Fixed costs for the company are $6,000, and variable costs per card are $1. A package of four cards is sold for $9.99. What is the marginal cost for making one more package of cards once the company has sold enough cards to break-even?

Question

Quizplus · Accepted Answer

The marginal cost refers to the cost of producing one additional unit, which in this case is a package of four cards. Since the variable cost per card is $1, the marginal cost for one more package (consisting of four cards) is 4 * $1 = $4. Fixed costs do not affect the marginal cost calculation, especially after reaching the break-even point.

K-Block Cooking Charts Are Poster-Sized Recipes Designed to Encourage Children