Table 8-7
$\begin{array}{|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array}{c}
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Average Total } \
\text { Cost (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & & 11.8 \
\hline 115 & 200 & & & 12.5 \
\hline 117 & 200 & 1264 & 1464 & \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$ Table 8-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 8-7.What is the variable cost of production when the firm produces 115 lanterns?

Question

Table 8-7
 $\begin{array}{|c|c|c|c|c|}
\hline \begin{array}{c}
\text { Quantity of } \
\text { Lanterns }
\end{array} & \begin{array}{c}
\text { Fixed Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Variable Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Total Cost } \
\text { (dollars) }
\end{array} & \begin{array}{c}
\text { Average Total } \
\text { Cost (dollars) }
\end{array} \
\hline 75 & 200 & 170 & 370 & 4.93 \
\hline 80 & 200 & 230 & 430 & 5.36 \
\hline 90 & 200 & & & 7.67 \
\hline 100 & 200 & 810 & & 11.8 \
\hline 115 & 200 & & & 12.5 \
\hline 117 & 200 & 1264 & 1464 & \
\hline 120 & 200 & 1480 & & \
\hline
\end{array}$ Table 8-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
-Refer to Table 8-7.What is the variable cost of production when the firm produces 115 lanterns?

Quizplus · Accepted Answer

To find the variable cost for producing 115 lanterns, we need to look at the row corresponding to 115 lanterns in the Variable Cost column, which is empty. However, we can calculate it by subtracting the fixed cost from the total cost: 
Variable Cost = Total Cost - Fixed Cost
Variable Cost = 1250 - 200
Variable Cost = 1050
Therefore, the variable cost of production when the firm produces 115 lanterns is $1,050.
The best choice is B because it correctly identifies the variable cost for producing 115 lanterns.

Table 8-7 Table 8-7 Shows Cost Data for Lotus Lanterns, a Producer