Exhibit 11-8 The table below shows how total cost varies with output in a factory producing watches:
Refer to Exhibit 11-8.If the output equals five watches per week,the average fixed cost and average variable cost of production equal ____ and ____,respectively.

Question

Exhibit 11-8 The table below shows how total cost varies with output in a factory producing watches:
 Refer to Exhibit 11-8.If the output equals five watches per week,the average fixed cost and average variable cost of production equal ____ and ____,respectively.

Quizplus · Accepted Answer

At an output of 5 watches per week, the total cost is $50. 
Average fixed cost = Total fixed cost / Output = $40 / 5 = $8 
Average variable cost = Total variable cost / Output = ($50 - $40) / 5 = $2 
Therefore, the answer is B) $10; $9.

Exhibit 11-8 the Table Below Shows How Total Cost Varies