Purchase Solution

average costs

Not what you're looking for?

Ask Custom Question

The Haverford Company is considering three types of plants to make a particular electronic device. Plant A is much more highly automated than plant B, which in turn is more highly automated than plant C. For each type of plant, average variable cost is constant so long as output is less than capacity, which is the maximum output of the plant. The cost structure for each type of plant is as follows:

Average Variable Costs Plant A Plant B Plant C
Labor $1.10 $2.40 $3.70
Materials .90 1.20 1.80
Other .50 2.40 2.00
Total $2.50 $6.00 $7.50
Total fixed costs $300,000 $75,000 $25,000
Annual capacity 200,000 100,000 50,000

What is average costs of producing 100,000, 200,000, 300,000, and 400,000 devices per year with plant A and for plant B.

Purchase this Solution

Solution Summary

The average costs in this case are computed.

Solution provided by:
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution


Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.