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Question
A ABC firms start producing pens and finds that the production cost of each pen is Rs 10. and the fixed expenditures of production is Rs 4500. If each pen is sold for Rs 25 , determine cost function.
A ABC firms start producing pens and finds that the production cost of each pen is Rs 10. and the fixed expenditures of production is Rs 4500. If each pen is sold for Rs 25 , determine cost function.
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Solution
The correct option is A 4500+10x
The cost function equation is expressed as C(x)= FC + V(x), where C equals total production cost, FC is total fixed costs, V is variable cost and x is the number of units.
4500 =fixed expenditures
10x = variable cost
C(X)= 4500+10x
The cost function equation is expressed as C(x)= FC + V(x), where C equals total production cost, FC is total fixed costs, V is variable cost and x is the number of units.
4500 =fixed expenditures
10x = variable cost
C(X)= 4500+10x
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