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 average total cost of production when the firm produces 120 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 average total cost of production when the firm produces 120 lanterns?

Quizplus · Accepted Answer

The average total cost is calculated by dividing the total cost by the quantity of lanterns. For 120 lanterns, the total cost is the sum of fixed cost ($200) and variable cost ($1480), which equals $1680. Dividing $1680 by 120 gives an average total cost of $14.

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