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27 January, 07:19

E6-22A (book/static) Rollins Mailbox produces decorative mailboxes. The company's average cost per unit is $ 23.43 when it produces 1 comma 400 mailboxes. Requirements 1. What is the total cost of producing 1 comma 400 mailboxes?

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  1. 27 January, 07:34
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    Total cost of 1400 mailboxes is $32,802

    Explanation:

    Total cost equation applicable in this scenario is given below:

    Total cost=average cost per unit*number of mailboxes

    average per unit is $23.43

    number of mailboxes is 1,400

    Total cost=$23.43*1400

    Total cost=$32,802

    Total cost function sometimes is given as fixed cost plus variable cost per unit * number of output

    However, in this case, it is believed that the only relevant cost is variable cost of $23.43 per unit of mailbox, hence the total cost was computed bearing in mind that only the variable cost is relevant.
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