Question

The costs for a new publishing company can be classified as fixed costs, such as rent and insurance, or variable costs, such as materials and labor. Fixed costs are constant, while variable costs change as the number of items produced changes. The graph shows the weekly variable costs based on the number of books produced.

a. If weekly fixed costs are $300, sketch a graph showing total expenses for the week.
b. Find the total cost of producing 75 books in a week.

Answer 1

Answer:

a) As weekly costs are fixed at $300, we simply need to shift the function up 300 units. (the new function is shown in blue on the attached graph).

b) Reading from the (blue) graph, the total cost of producing 75 books in a week is $600.

fixed cost + variable cost = $300 + $300 = $600