What is the economic cost function for the business

Reference no: EM13198712

Two graduate business students are considering opening a full-service car wash in Greenville, North Carolina, after graduation. This is an alternative to employment with a local manufacturing firm where they would each earn $70,000 per year. A fully equipped facility can be leased at a cost of $35,000 for the year. Additional projected costs are $15,000 for overhead, and $5 per automobile for materials and supplies. Full detail automobile cleaning would be priced at $25.
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 breakeven number of units for this operation? (Assume a $25 price and ignore interest costs associated with the timing of the lease payments.)

Reference no: EM13198712

Questions Cloud

What will total cost function be if rice loafs are produced : Kathy's Bakery is a local full-service bakery in Omaha, Nebraska. Kathy sells loaves of wheat bread for $3 a loaf. Of this amount, $1.50 is profit contribution. She is considering an attempt to differentiate her shop from several other competitors..

What is the distance traveled by the tip of the wiper : A windshield wiper that is 2 feet long sweeps through an angle of 157°. What is the distance traveled by the tip of the wiper?

Hypothesis remembering that hypotheses involve variables : Develop a hypothesis, remembering that hypotheses involve variables and cause/effect relationships. Be specific in the research design you would use, including proper terminology. The intent is to assess your ability to reason about social issues,..

State the slope and y-intercept of the graph : State the slope and y-intercept of the graph

What is the economic cost function for the business : A fully equipped facility can be leased at a cost of $35,000 for the year. Additional projected costs are $15,000 for overhead, and $5 per automobile for materials and supplies. Full detail automobile cleaning would be priced at $25.

Library assignment-determining the economic : To continue with your evaluation for the new vice president position, the president of your company, Mr. Wilson, has asked you to prepare a report for him determining the economic impact of a coffee pushcart that will provide hot coffee and cappuccin..

Identify the number of emergency appointments : Identify the number of emergency appointments, patient load and administrative costs for each month within the relevant range and construct an excel spreadsheet and create a regression analysis to estimate

Explain most effective in refining solutions to the problem : Compare two steps that would be most effective in refining solutions to the problem and resolutions to the issues presented by the topic

Calculate the incremental profit fluff rite would earn : Fluff Rite, Inc., manufactures stove top popcorn poppers that it sells to distributors, who then customize and distribute the products to retailers as house-brand poppers. The yearly volume of output is 100,000 units.

User Account

All Pages