the fixed costs of producing a wild widget are $34000. the variable costs are $5.00 per widget. what is the average cost per widget of 7000 wild widgets? round to the nearest tenths.
Generally variable costs are expressed as some function of the number of widgets. If the variable costs are just $5.00, then they don't vary, and the cost per widget is just $34005.00, regardless of how many are made.
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To find the average cost per widget, we need to calculate the total cost and divide it by the number of widgets produced.
Fixed costs = $34,000
Variable costs per widget = $5.00
Number of widgets produced = 7,000
Total variable costs = variable cost per widget * number of widgets produced
Total variable costs = $5.00 * 7,000 = $35,000
Total costs = fixed costs + total variable costs
Total costs = $34,000 + $35,000 = $69,000
Average cost per widget = total costs / number of widgets produced
Average cost per widget = $69,000 / 7,000 = $9.8571 (rounded to the nearest tenth)
Therefore, the average cost per widget of 7000 wild widgets is approximately $9.9.
To find the average cost per widget, you need to calculate the total cost and then divide it by the number of widgets.
1. Calculate the total cost of producing 7000 wild widgets:
Total Cost = Fixed Cost + (Variable Cost per Widget × Number of Widgets)
Total Cost = $34000 + ($5.00 × 7000)
Total Cost = $34000 + $35000
Total Cost = $69000
2. Divide the total cost by the number of widgets:
Average Cost per Widget = Total Cost / Number of Widgets
Average Cost per Widget = $69000 / 7000
Average Cost per Widget ≈ $9.86
Therefore, the average cost per widget for 7000 wild widgets is approximately $9.86.