Bob’s Burgers currently produces and sells 4000 burgers per month with the following costs:
$\begin{array}{ll}
\text { Variable costs } & \$ .50 \text { per unit } \
\text { Fixed costs } & \$ 2000
\end{array}$
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month.
-Bixby Inc.expects total costs to be $2500 when 80 units are sold and the variable cost is $10 per unit.Bixby expects to sell 90 units in July.What will be expected total costs in July?

Question

Bob’s Burgers currently produces and sells 4000 burgers per month with the following costs:
$\begin{array}{ll}
\text { Variable costs } & \$ .50 \text { per unit } \
\text { Fixed costs } & \$ 2000
\end{array}$ 
Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month.
-Bixby Inc.expects total costs to be $2500 when 80 units are sold and the variable cost is $10 per unit.Bixby expects to sell 90 units in July.What will be expected total costs in July?

Quizplus · Accepted Answer

The expected total costs in July for Bixby Inc. can be calculated by adding the fixed costs and the variable costs for 90 units. Given that the fixed costs are $1700 (calculated from $2500 total costs minus $800 variable costs for 80 units), and the variable cost per unit is $10, the total costs for 90 units are $1700 + (90 * $10) = $2600.

Bob’s Burgers Currently Produces and Sells 4000 Burgers Per Month Variable costs $.50 per unit Fixed costs $2000\begin{array}{ll}\text { Variable costs } & \$ .50 \text { per unit } \\\text { Fixed costs } & \$ 2000\end{array} Variable costs Fixed costs ​$.50 per unit $2000​

Bob’s Burgers Currently Produces and Sells 4000 Burgers Per Month $\begin{array}{ll}\text { Variable costs } & \$ .50 \text { per unit } \\\text { Fixed costs } & \$ 2000\end{array}$