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 variable cost per unit of production when the firm produces 90 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 variable cost per unit of production when the firm produces 90 lanterns?

Quizplus · Accepted Answer

The average total cost for 90 lanterns is $7.67, and the fixed cost is $200. The total cost is calculated as average total cost multiplied by quantity, which is $7.67 * 90 = $690.3. Subtracting the fixed cost from the total cost gives the variable cost: $690.3 - $200 = $490.3. The average variable cost is then $490.3 / 90 = $5.44.

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