Donald Trump has written a self improvement book that has the following cost characteristics: Selling Price...
Donald Trump has written a self improvement book that has the following cost characteristics:
| Selling Price | $14.00 per book |
| Variable Cost per unit: | |
| Production | $ 6.00 |
| Selling and Administration | $ 3.00 |
| Fixed Costs: | |
| Production | $100,000 per year |
| Selling and Administration | $20,000 per year |
What is the cost formula for total cost for this company, where TC = Total cost and Q = units sold?
Homework Answers
Total Cost = Variable Cost + Fixed Cost
Variable Cost = Units sold X Variable cost per unit
Total Variable Cost = (6 + 3) = $ 9 per unit
Fixed Cost = (100,000 + 20,000) = $ 120,000
TC = 9Q + 120,000
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