PROBLEM ONE:
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PROBLEM TWO:
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PROBLEM THREE:
PROBLEM FOUR:
A pair of shoes that wholesales for $28.79 have the following costs:
Manufacturing Labor 2.25
Materials 4.95
Factory overhead, operating expense 8.5
Sales costs 4.5
Advertising 2.93
Research & Development 2
Interest 0.33
Net Income 3.33
A. Which are variable, and which are fixed?
B. If output were to rise, what would happen to average total costs,
and why?
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PROBLEM FIVE (EXTRA CREDIT 15 POINTS):
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