Chloe’s Cafe bakes croissants that it sells to local restaurants and grocery sto
ID: 2416035 • Letter: C
Question
Chloe’s Cafe bakes croissants that it sells to local restaurants and grocery stores. The average costs to bake the croissants are $0.65 for 3,800 and $0.60 for 7,600.
If the total cost function for croissants is linear, what will be the average cost to bake 6,800? (Do not round intermediate calculations. Round your final answer to 4 decimal places.)
Required:If the total cost function for croissants is linear, what will be the average cost to bake 6,800? (Do not round intermediate calculations. Round your final answer to 4 decimal places.)
Explanation / Answer
Unit Variable cost = (3800 X 0.65 - 7600 X 0.60)/(7600-3800) =4560-2470/3800 0.55 per unit Fixed cost = 7600 X(0.60-0.55) or 3800 X(0.65-0.55) $380 Then , At 6800, $380+(0.55 X 6800)= $ 4,120 Average cost = 4,120/6800 0.61 So average cost to bake 6800 uints will be $ 0.61