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27 February, 17:57

produces deluxe razors that compete with Gillette's Mach line of razors. Total manufacturing costs are $ 170 comma 000 when 20 comma 000 packages are produced. Of this amount, total variable costs are $ 80 comma 000. What are the total production costs when 25 comma 000 packages of razors are produced? Assume the same relevant range

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  1. 27 February, 20:54
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    Total cost = $190,000

    Explanation:

    Giving the following information:

    Total manufacturing costs are $170,000 when 20,000 packages are produced.

    The total variable costs are $80,000 at 20,000 units.

    First, we need to determine the unitary variable cost and total fixed costs.

    Unitary variable cost = total variable cost / number of units

    Unitary variable cost = 80,000/20,000 = $4 per unit

    Total fixed costs = total cost - total variable cost

    Total fixed costs = 170,000 - 80,000 = $90,000

    Now, we need to determine the total cost of 25,000 units.

    Total cost = 90,000 + 4*25,000 = $190,000
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Home » Business » produces deluxe razors that compete with Gillette's Mach line of razors. Total manufacturing costs are $ 170 comma 000 when 20 comma 000 packages are produced. Of this amount, total variable costs are $ 80 comma 000.
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