Sea Side Enterprises is trying to predict the cost associated with producing its anchors.At a production level of 5,000 anchors,Sea Side Enterprises' average cost per anchor is $52.00.If $15,000 of the total costs are fixed,what is the variable cost of producing each anchor?
A)$3.00
B)$49.00
C)$245.00
D)$52.00

Question

Quizplus · Accepted Answer

B)
Total cost = $52 × 5,000 = $260,000
Variable cost = $260,000 - 15,000 = $245,000
$245,000 divided by 5,000 = $49.00

Sea Side Enterprises Is Trying to Predict the Cost Associated