During the previous month, a firm produced 200
tablet devices at an average variable cost of $39
and at an average fixed cost of $12
.
During the month, the firm's total costs were
Total variable cost = Average variable cost x Quantity produced
Total variable cost = $39 x 200 = $<<39*200=7800>>7,800
Total fixed cost = Average fixed cost x Quantity produced
Total fixed cost = $12 x 200 = $<<12*200=2400>>2,400
Total cost = Total variable cost + Total fixed cost
Total cost = $7,800 + $2,400 = $<<7800+2400=10200>>10,200
To calculate the firm's total costs for the month, we need to consider both the variable costs and the fixed costs.
Variable costs: The firm produced 200 tablet devices at an average variable cost of $39 per device. Therefore, the total variable cost can be calculated as follows:
Total variable cost = Average variable cost per unit * Number of units produced
Total variable cost = $39 * 200
Total variable cost = $7,800
Fixed costs: The firm incurred an average fixed cost of $12. Since this cost is fixed and does not depend on the number of units produced, the total fixed cost remains the same regardless of the quantity produced.
Total fixed cost = $12
Total costs: To find the total costs for the month, we add the total variable cost and the total fixed cost.
Total costs = Total variable cost + Total fixed cost
Total costs = $7,800 + $12
Total costs = $7,812
Therefore, the firm's total costs for the month were $7,812.
To calculate the firm's total costs, you need to consider both the average variable cost and the average fixed cost.
First, you need to calculate the total variable cost by multiplying the average variable cost per unit by the number of units produced. In this case, the average variable cost is $39 and the firm produced 200 tablet devices. So, the total variable cost is:
Total Variable Cost = Average Variable Cost per unit x Number of units produced
Total Variable Cost = $39 x 200 = $7,800
Next, you need to calculate the total fixed cost. The average fixed cost is given as $12, but since it is an average, it doesn't change with the number of units produced. So, the firm's total fixed cost remains the same regardless of the number of units produced. Therefore, the total fixed cost is:
Total Fixed Cost = Average Fixed Cost per unit x Number of units produced
Total Fixed Cost = $12 x 1 (since the total fixed cost remains the same)
Now, to calculate the firm's total costs, you simply add the total variable cost and the total fixed cost together:
Total Costs = Total Variable Cost + Total Fixed Cost
Total Costs = $7,800 + $12
Therefore, the firm's total costs during the month were $7,812.