Question

Different business costs. For simplicity, assume the ingredients for three dozen cookies are:

One 16 oz. box of sugar ($2.50)

One 12 oz. bag of chocolate chips ($3.50)

One 2 lb. bag of flour ($3.00)

One dozen eggs ($3.00)

A fixed cost of $30 to rent a kitchen with an oven for a day

Assume in an hour you can bake two dozen cookies and that the cost of your time is $10 an hour.

In a paper: Calculate the average total cost, average variable cost, average fixed cost, and marginal cost for baking one dozen, two dozen, three dozen, four dozen, five dozen, six dozen, seven dozen, eight dozen, nine dozen, and ten dozen cookies. Show your work for the calculations and create a table with just cost numbers. Create the graphs for each of the cost numbers. Graph them on the same graph. Recalculate the costs assuming the cost to rent the kitchen with an oven dropped to $15. Compare the new calculations with the old calculations.

Answer 1

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