Calculation of Average Costs with Economies of Scope Jewelry Designs is considering a merger with Beads Supply Stores. Jewelry's total operating costs of producing services are $300,000 for sales volume of $2 million. Beads' total operating costs of producing services are $125,000 for a sales volume (JP) of $2.25 million. Calculate the average cost of production for the Jewelry and Beads firms, respectively.
A) 15%, 5.56%
B) 5.56%, 15%
C) 15%, 55.56%
D) 13.33%, 6.25%
Correct Answer:
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