Different cost calculations of cost equation

Reference no: EM1311344

Suppose you hire a furloughed Wall Street analyst to help you analyze your production process, and she uses your historical cost records to estimate that your total cost function is C(Q) = 100 + 2Q + 3.5Q2. Using this equation, answer the following and show your logic and calculations.

a. How much is your firm's profit or loss at an output of zero? Explain.

b. With the above cost equation, average total costs (ATC), first decline as output increases, and then begin to rise. Assuming output occurs in whole units, i.e. 1, 2, 3,... at what output does the low point of ATC occur and what is the ATC at that output? Show your calculations.

c. What is the total cost of an output of 500?

d. What is the Average Variable Cost (AVC) at a production level of 10?

Reference no: EM1311344

Questions Cloud

Explaining capital and labor goods : The advent of the one man bus involved more capital equipment: an automatically operated coin box and door control device - to name two of the capital goods that replaced the conductor."

Purpose a schedule of cost of goods : Prepare a schedule of cost of goods - Purpose a schedule of cost of goods manufactured for the month of December 2006.

Normal distribution problem : LSAT scores are normally distributed, with a mean of 150 and s = 10.

Classify costs as either variable or fixed costs : Classify the costs as either variable or fixed costs. Assume there are no mixed costs. Enter the dollar amount of each cost in the appropriate column and total each classification.

Different cost calculations of cost equation : Assume you hire a furloughed Wall Street analyst to aid you examine your production process, and she uses your historical cost records to estimate that your total cost function is C(Q) = 100 + 2Q + 3.5Q2. Using this equation, answer the following ..

Normal frequency distribution : In a normal frequency distribution, 32% of the cases:

Purpose adjusting entry to recognise bad debt expens : Purpose the adjusting entry to recognise bad debt expens - Assume the same facts as above except that the Allowance for Doubtful Accounts account had a $500 debit balance before the current year's provision for uncollectible accounts.

Purpose the necessary general journal entries : Purpose the necessary general journal entries for the month of October for the Seinfeld Company for each situation given below. Seinfeld uses a perpetual inventory system.

Distribution of scores : In a distribution of scores, the arithmetic mean is 51, the median is 55, and the mode is 62. What is the score, in percentile form, of a subject who does less well than two-thirds of the sample?

User Account

All Pages