Which of the following is a fixed cost for an automobile manufacturing plant?Group of answer choicesadministrative salarieselectricity used by assembly-line machinessales commissionstires

All of the following are manufacturing costs except:Multiple choice question.direct materialsoffice salariesdirect laboroverhead costs

You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function q  10 KL, where q is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machine rents for r  $5,000 per week, and each team costs w  $2500 per week. Engine costs are given by the cost of labor teams and machines, plus $2000 per engine for raw materials. Assume your plant has a fixed installation of 5 assembly machines as part of its design. (a) We get the total cost function is TC(q)=25000+2000q, what are average and marginal costs for producing q engines? How do average costs vary with output? (b) How many teams are required to produce 250 engines? What is the average cost per engine? (c) You are asked to make recommendations for the design of a new production facility. What capital/labor (K/L) ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of output q? (Hint: Here we no longer assume that K is fixed at 5. You need to find the combination of K and L that minimizes cost at any level of output q.)

Which of these would not be regarded as a variable cost for a service station?Group of answer choicesPetrol and oil.Confectionery sold in the shop.Parts used in the workshop.Salary of manager.

Question 461 ptsCosts that vary depending on the number of units produced or sold are referred to as fixed costs.Group of answer choicesfalsetrue PreviousNext

Which of the following is a variable cost?Group of answer choicesstraight-line depreciationrent expensewages of production workersproperty insurance