A firm produces and sells calendars. Last year, it produced 3,250 calendars and

Question

A firm produces and sells calendars. Last year, it produced 3,250 calendars and sold each for $10. In producing these calendars, it incurred variable costs of $25 000 and a total cost of $48 000. What were the firm's fixed cost per calendar. Express your answer to the nearest cent. $ ____
Please enter 2 digits after the decimal point. A firm produces and sells calendars. Last year, it produced 3,250 calendars and sold each for $10. In producing these calendars, it incurred variable costs of $25 000 and a total cost of $48 000. What were the firm's fixed cost per calendar. Express your answer to the nearest cent. $ ____
Please enter 2 digits after the decimal point.

Explanation / Answer

Total Cost= Variable cost + Fixed cost and so Fixed cost = Total cost - Variable cost

variable costs=$25000

Total cost=$48000

Thus Fixed cost=48000-25000=23000

Calendars produced=3250

Thus Fixed cost per calendar=23000/3250=7.08

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