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Average Cost Calculations

Question 107

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Average cost calculations.Spinning Health Club has the following cost equation:
Total Costs = $40,000+$80n,where n = number of memberships.
Required:
a.Calculate Spinning's average fixed cost per membership when there are 2,000 memberships.
b.What is the average variable cost per membership when there are 2,000 memberships?
c.Calculate the average cost per membership when there are 2,000 memberships.
(Spinning Health Club;average cost calculations. )

Correct Answer:

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a.Average fixed cost = $40,000...

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