The table shows the production function for snack cakes and labor. Assume fixed costs are $200/day and that one full time worker costs $80/day ($10x8hrs). Given this information, what is the total cost to produce 45 cases? (assume labor is your only variable cost)
# of Workers |
Q of Snack Cakes | TVC | TFC | TC | MC |
0 | 0 | ||||
1 | 5 | ||||
1.6 | 10 | ||||
2 | 15 | ||||
2.35 | 20 | ||||
2.75 | 25 | ||||
3.22 | 30 | ||||
3.75 | 35 | ||||
4.35 | 40 | ||||
5 | 45 | ||||
5.75 | 50 | ||||
6.6 | 55 | ||||
7.5 | 60 | ||||
8.5 | 65 | ||||
10 | 70 |
Supporting Mateials
$200 |
$400 |
$600 |
$800 |
Question 18
The table shows the production function for snack cakes and labor. Assume fixed costs are $200/day and that one full time worker costs $80/day ($10x8hrs). Given this information, what is the marginal cost of the 50th case? (assume labor is your only variable cost)
# of Workers |
Q of Snack Cakes | TVC | TFC | TC | MC |
0 | 0 | ||||
1 | 5 | ||||
1.6 | 10 | ||||
2 | 15 | ||||
2.35 | 20 | ||||
2.75 | 25 | ||||
3.22 | 30 | ||||
3.75 | 35 | ||||
4.35 | 40 | ||||
5 | 45 | ||||
5.75 | 50 | ||||
6.6 | 55 | ||||
7.5 | 60 | ||||
8.5 | 65 | ||||
10 | 70 |
Supporting Mateials
$400 |
$60 |
$12 |
$0.75 |
$5 |
Question 19
Suppose you are a manager of a dairy farm. You are currently
milking 100 cows and each cow produces 22,000 pounds (220 cwt) of
milk per year. To produce this quantity of milk, the farm milks the
each cow twice a day (once in the morning and once in the
afternoon). Now suppose milk prices are increasing. Over the past
few months the price of milk has increased and milk is now selling
for $15/cwt. The increase in milk price has got you thinking –
should I increase my milking times from twice a day to three times
a day (adding another milking time in the evening). If you do
increase milking times to three times a day, your VT dairy
extension specialist estimates your milk production per cow will
increase to 26,000 pounds of milk per year (260 cwt per cow per
year). Of course you will need more labor to get this extra milk.
Each milking requires 2 people to work 5 hours each. You must pay
each worker $10.00/hr during the week and time and a half during
the weekends ($15.00/hour). You will need to feed your cows some
extra feed since they will be producing more milk. The extension
specialist estimates you will need to feed each cow an additional 4
pounds of soybean corn meal mix per cow per day in the milking
parlor. Soybean/corn feed sells for $250/ton at the local coop.
Operating the milking equipment and parlor an additional 5
hours/day will also cost you an additional $1,000 in electricity
per year. Finally, since your cows will be working harder and will
be stressed more, you also expect you vet bills go up about $5,000
per year.
What is the marginal revenue of selling another cwt of milk?
$3.2 per cwt. |
$12 per cwt |
$15 per cwt |
$22.22 per cwt |
17.
fixed costs = $200/day
cost of one full time worker (variable cost)= $80/day ($10x8hrs).
To produce 45 cases, 5 workers are used.
Therefore, cost of 5 full time workers = $80 x 5 =$ 400 per day
TVC = $400
TFC = $200
Therefore TC = $ 600 (TVC+TFC)
18.
To produce 50 cases, 5.75 workers are used.
Therefore, cost of 5.75 full time workers = $80 x 5.75 =$ 460 per day
TVC = $460
TFC = $200
Therefore TC of producing 50 cases = $ 660.
MC of producing 50th case = TC of producing 50 case - TC of producin 45 cases
= $60 ( 660-600)
The table shows the production function for snack cakes and labor. Assume fixed costs are $200/day...
Assume fixed costs are $200/day and labor costs are $80 per day per worker (assume labor costs are the only variable costs). If the company could sell cases of snack cakes for $14 per case, how many cases of snack cakes should the company produce in order achieve the highest profit possible? # of Workers Q of Snack Cakes TVC TFC TC MC 0 0 1 5 1.6 10 2 15 2.35 20 2.75 25 3.22 30 3.75 35 4.35...
A dairyman comes to you for some help. He says the average production per cow in his existing herd is 22,000 lbs per year. He says he has enough barn space, forage, and labor for 8 more cows. His neighbor has offered to sell him the cows for $1,400 each. He is estimating the cows will produce 20,000 pounds each. The value of milk is S16.75/cwt. He currently purchases all of his feed. The average cost to feed each cow...