Question

review help please

aments Exhibit 7-8 Costs schedules for producing pleza Fixed Cost Variable Cost Total Cost Marginal Cast Pizzas 0 $ $ s $ ames 5 use Online ng 2 13 int Survey 3 10 4 00 40 5 20 6 5 215 By filling in the blanks in Exhibit 7-8, the total cost of producing zero pizzas is shown to be equal to: O $105 0.55 5100 O 595 th Screen Shot 2.png Screen Shot 2png Screen Shot 2.png Screen Shot 2png MacBook Pro SC 80 DOO DOO 11 £ # 1 $ 4 2 3 % 5 6 & 7 8 9 e W E R T Y I

Answer 1

Pizza	FC	VC	TC	MC
0	100		100
1	100	5	105	5
2	100	15	115	10
3	100	25	125	10
4	100	40	140	15
5	100	60	160	20
6	100	85	185	25
7	100	115	215	30

The table is filled up using these formulas

total cost=total fixed cost+total variable cost

marginal cost=change in total cost while producing one extra unit

the total cost of producing zero pizzas=fixed cost=$100

the fixed cost of producing 6 pizzas=$100

average variable cost of producing 4 pizzas=variable cost of producing 4 pizzas/4=40/4=$10

as per exhibit 7-9 the marginal cost of producing the third unit=total variable cost of producing producing the third unit-total variable cost of producing the second unit=108-84=$24

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