What is the accounting cost function for the business

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Reference no: EM13239741

Three graduate students are considering opening a fruit smoothie stand in the Harbor Springs, MIchigan, resort area during their summer break. This is an alternative to summer employment with a local firm, where they would each receive $6,000 over the 3-month summer period. A fully equipped facility can be leased at a cost of $8,000 for the summer. Additional projected costs are $1,000 for insurance and $3.20 per unit for materials and supplies. Their fruit smoothies would be priced at $5 per unit.

A.) What is the accounting cost function for this business?

B.) What is the economic cost function for this business?

C.) What is the economic break-even number of units for this operation?

Reference no: EM13239741

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