Inspection service and operating costs

Assignment Help Financial Accounting

Reference no: EM13823108

This is a repost. The last respondent did not give a complete answer. This question in in regards to an inspection service and their operating costs. What is needed: Draw a graph illustrating the total costs under this plan using the information below. Label the axes and show the costs at 600, 800, and 1,000 units inspected.

VC per inspection=Change in cost/change in inspection units

=($4,000-$3,600.)/1,000.-600.)

=$400.400

=$1

Total FC=TC for 1,000 units=Total VC for 1,000 unit=$4000-($1x1,000)

=$4,000-1,000

=$3,000.

Operating cost equation = FC+VC

OC for 800 inspections=FC+VC

=$3,000 + ($1 X800)

=$3,000 + $800

=$3,800

Reference no: EM13823108

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