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 total cost was
A)$1.71.
B)$4.00.
C)$5.71.
D)$6.00.

Question

Quizplus · Accepted Answer

Average total cost is calculated by dividing total cost by the quantity of output. So, 
Average total cost = Total cost / Quantity of output 
= $40,000 / 7,000 pounds 
= $5.71 per pound.

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