Scenario 13-19
Doreen's Dairy produces and sells Swiss cheese. Last year, it produced 7,000 pounds and sold each pound for $6. In producing the 7,000 pounds, the dairy incurred variable costs of $28,000 and a total cost of $40,000.
-Refer to Scenario 13-19. In producing the 7,000 pounds of cheese, the firm's average fixed cost was
A)$0.29.
B)$1.71.
C)$2,00.
D)$6.00.

Question

Quizplus · Accepted Answer

To find the average fixed cost, we need to subtract the variable costs from the total costs: 
Average fixed cost = (Total cost - Variable cost) / Quantity
= ($40,000 - $28,000) / 7,000 
= $12,000 / 7,000 
= $1.71 per pound.

Scenario 13-19 Doreen's Dairy Produces and Sells Swiss Cheese. Last Year, It