Question

The table below represents the costs of producing sneakers.

Quantity	Fixed Cost	Variable Cost	Total Cost	Average Fixed Cost	Average Variable Cost	Average Total Cost
8	$117	$10	$127	?	?	?
16	$117	$60	$177	?	?	?
24	$117	$110	$227	?	?	?
32	$117	$160	$277	?	?	?
40	$117	$210	$327	?	?	?

Find the average total cost for producing 32 sneakers. Round your answer to the nearest cent.

Provide your answer below:

Answer 1

Quantity	Fixed Cost	Variable Cost	Total Cost	Average Fixed Cost ($)	Average Variable Cost ($)	Average Total Cost ($)
8	$117	$10	$127	14.63	1.25	15.88
16	$117	$60	$177	7.31	3.75	11.06
24	$117	$110	$227	4.88	4.58	9.46
32	$117	$160	$277	3.66	5	8.66
40	$117	$210	$327	2.93	5.25	8.18

Calculation:

Quantity	Fixed Cost	Variable Cost	Total Cost	Average Fixed Cost ($)	Average Variable Cost ($)	Average Total Cost ($)
8	$117	$10	$127	117/8 = 14.63	10/8=1.25	14.63+1.25=15.88
16	$117	$60	$177	117/16 = 7.31	60/16=3.75	7.31+3.75=11.06
24	$117	$110	$227	117/24 = 4.88	110/24=4.58	4.88+4.58=9.46
32	$117	$160	$277	117/32= 3.66	160/32=5	3.66+5=8.66
40	$117	$210	$327	117/40=2.93	210/40=5.25	2.93+5.25=8.18

Formula used in calculation:

1. Average fixed cost = Fixed cost / Quantity

2. Average variable cost = Variable cost / Quantity

3. Average total cost = Total cost / Quantity

(or)

Average total cost = Average fixed cost + Average fixed cost

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Average total cost for producing 32 sneakers:

Average total cost = Total cost / Quantity = 277 / 32 = 8.66

Average total cost for producing 32 sneakers = $8.66