Swansea Manufacturing currently produces 3,000 tires per month. The following per unit data for 3,000 tires apply for sales to regular customers:

The plant has capacity for 5,000 tires and is considering expanding production to 4,000 tires. What is the total cost of producing 4,000 tires?

Question

Swansea Manufacturing currently produces 3,000 tires per month. The following per unit data for 3,000 tires apply for sales to regular customers:

The plant has capacity for 5,000 tires and is considering expanding production to 4,000 tires. What is the total cost of producing 4,000 tires?

Quizplus · Accepted Answer

Total cost of producing 4,000 tires = [($38+ $14 + $19) × 4,000 units] + ($20 × 3,000 units) = $344,000

Swansea Manufacturing Currently Produces 3,000 Tires Per Month