The cost components of a heater include $30 for the compressor,$10 for the sheet molded compound frame,and $75 per unit for assembly.The factory machines and tools cost is $60,000.The company expects to produce 1,000 heaters in the coming year.What cost function best represents these costs?
A) y = 60,000 + 115X
B) y = 1,000 + 60,000X
C) y = 60,000 + 1,000X
D) y = 1,000 + 115X

Question

Quizplus · Accepted Answer

The cost function includes fixed costs ($60,000 for machines and tools) and variable costs per unit ($30 for the compressor, $10 for the frame, and $75 for assembly, totaling $115 per unit). Thus, the cost function is y = 60,000 + 115X.

The Cost Components of a Heater Include $30 for the Compressor,$10