menu
bartleby
search
close search
Hit Return to see all results

Use the following data for answering Questions 3-6: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 highlyautomated 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 foreach type of plant is as follows:Plant CPlant APlant BAverage Variable Costs$1.10$2.40$3.70Labor1.20Materials0.901.80Other0.502.402.00$2.50$6.00$7.50Total$25,000$300,000$75,000Total fixed costsAnnual capacity$50,000200,000100,000Derive the average costs of producing 100,000, 200,000, 300,000, and 400,000 devices per year with Plant A. (NOTE: for output exceeding the capacity of a single plant, assume that morethan one plant of this type is built, i.e., all inputs are duplicated in each additional plant. What are the average costs per unit for the four market output levels?a. $5.00 $4.00 $4.50 $5.00b. $5.00 $2.50 $3.50 $3.25C. $5.00 $7.50 $10.00 $12.50d.$8.50 $5.50 $4.50 $4.00O O OO

Question
Use the following data for answering Questions 3-6:
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:
Plant C
Plant A
Plant B
Average Variable Costs
$1.10
$2.40
$3.70
Labor
1.20
Materials
0.90
1.80
Other
0.50
2.40
2.00
$2.50
$6.00
$7.50
Total
$25,000
$300,000
$75,000
Total fixed costs
Annual capacity
$50,000
200,000
100,000
Derive the average costs of producing 100,000, 200,000, 300,000, and 400,000 devices per year with Plant A. (NOTE: for output exceeding the capacity of a single plant, assume that more
than one plant of this type is built, i.e., all inputs are duplicated in each additional plant. What are the average costs per unit for the four market output levels?
a. $5.00 $4.00 $4.50 $5.00
b. $5.00 $2.50 $3.50 $3.25
C. $5.00 $7.50 $10.00 $12.50
d.
$8.50 $5.50 $4.50 $4.00
O O OO
help_outline

Image Transcriptionclose

Use the following data for answering Questions 3-6: 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: Plant C Plant A Plant B Average Variable Costs $1.10 $2.40 $3.70 Labor 1.20 Materials 0.90 1.80 Other 0.50 2.40 2.00 $2.50 $6.00 $7.50 Total $25,000 $300,000 $75,000 Total fixed costs Annual capacity $50,000 200,000 100,000 Derive the average costs of producing 100,000, 200,000, 300,000, and 400,000 devices per year with Plant A. (NOTE: for output exceeding the capacity of a single plant, assume that more than one plant of this type is built, i.e., all inputs are duplicated in each additional plant. What are the average costs per unit for the four market output levels? a. $5.00 $4.00 $4.50 $5.00 b. $5.00 $2.50 $3.50 $3.25 C. $5.00 $7.50 $10.00 $12.50 d. $8.50 $5.50 $4.50 $4.00 O O OO

fullscreen
check_circleAnswer
Step 1

To calculate the average cost of producing 100,000 , 200,000 , 300,000 and 400,000 devices in a  year.

Step 2

Total cost refers to the expenses that are incurred in the production of goods and services. It has two main components: Total Fixed Cost (TFC) and Total Variable Cost (TVC). 

Average Cost can be calculated by dividing total cost with the number of units produced.

Step 3

Total cost of producing 100,000 devices per year with plant A will be equal to the summation of TVC (250000) AND TFC (3...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Our solutions are written by experts, many with advanced degrees, and available 24/7

See Solution
Tagged in

Business

Economics

Related Economics Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Who selects the chairperson of the federal reserve system ? Describe the relationship between the Bo...

A: Federal Reserve system:Federal Reserve system or Fed is a central bank of the United States which ma...

question_answer

Q: The historic debate about the benefits and costs of trade liberalization (freer trade) continues tod...

A: Click to see the answer

question_answer

Q: loui's preferences over pizza (x) and other goods (y) are given by U(X,Y)=XY^2, with associated marg...

A: Utility:The utility is the power or ability of the goods and services that satisfy the consumers wan...

question_answer

Q: please help

A: Let\'s look at what information we have to work with. 

question_answer

Q: When asked for investment advise, humorist Will Rogers joked that people should "buy land. They ain'...

A: Land has a fixed supply. So, the price of land completely depends upon the demand for it.This statem...

question_answer

Q: If the reserve ratio requirement in the banking system is 7 percent, what is the money multiplier? A...

A: Money multiplier:Money multiplier can be calculated as follows:

question_answer

Q: Suppose the large number of bike accidents in a small town results in new legislation that requires ...

A: Suppose the large number of bike accidents in a small town results in new legislation that requires ...

question_answer

Q: Which of the following is an appropriate solution to the problem of slow real income growth among th...

A: Real Income: the income of an individual or a group which come after adjusting the inflation is know...

question_answer

Q: Could you please briefly explain the purpose of present worth analysis? And how it pertains to prese...

A: The present value (PV) is defined as a current value which is related to a future sum of money and i...

Sorry about that. What wasn’t helpful?