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12 March, 10:10

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are a. $7,500. b. $25,000. c. $32,500. d. $67,500.

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  1. 12 March, 10:26
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    option (b) $25,000

    Explanation:

    Number of dog beds produced and sold = 500

    The average cost of production per dog bed = $50

    Selling price of each dog bed = $65

    Now,

    Average cost = [ Total cost ] : [ Number of units produced ]

    or

    $50 = Total cost : 500

    or

    Total cost = 500 * $50

    or

    Total cost = $25,000

    Hence,

    The answer is option (b) $25,000
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