Hypothetical problem A corn farmer produces 300 sacks of corn at 50 kgs./sack. Prevailing price of corn/sack is P1,200. • He incurred the following annual expenses (P): • Fixed costs: land rent @5,000; irrigation fee@3,000; warehouse @2,500; insurance @3,000; interest on loan @4,200; entrepreneuship@7,000; salaries/wages@10,000; taxes@4,600; depreciation@2,600 Variable costs: seeds@5,0003; fertilizer@10,500: labor@18,000%3; pesticides@8,000; tractor@3,000; transportation, @3,500. Compute for: 1. Total Cost, Total Fixed Cost, Total Variable Cost 2. Average total cost, average fixed cost, average variable cost 3. Total Revenue, average revenue 4. Total profit or Loss
Hypothetical problem A corn farmer produces 300 sacks of corn at 50 kgs./sack. Prevailing price of corn/sack is P1,200. • He incurred the following annual expenses (P): • Fixed costs: land rent @5,000; irrigation fee@3,000; warehouse @2,500; insurance @3,000; interest on loan @4,200; entrepreneuship@7,000; salaries/wages@10,000; taxes@4,600; depreciation@2,600 Variable costs: seeds@5,0003; fertilizer@10,500: labor@18,000%3; pesticides@8,000; tractor@3,000; transportation, @3,500. Compute for: 1. Total Cost, Total Fixed Cost, Total Variable Cost 2. Average total cost, average fixed cost, average variable cost 3. Total Revenue, average revenue 4. Total profit or Loss
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQ
Related questions
Question
Given are the formulas for computing. Do as indicated. Answer the questions below and provide a solution for each.
Transcribed Image Text:COSTS OF PRODUCTION FORMULAS
Total cost (TC) = total fixed cost (TFC) + total variable cost
(TVC) Total Product (TP)
Average fixed cost (AFC) = TFC ÷ output or total
product or quantity
Average variable cost = TVC ÷ output or total
product or quantity
- Marginal cost (MC)= change in total Cost (TC) ÷
change in TP or output
Average total cost (ATC) = AFC + AVC or
%3D
- Average Total Cost = TC ÷ TP
- Total Revenue (TR) = price x TP
- Total Profit/Loss = TR - TC
Break even : TR – TC = 0
Transcribed Image Text:Hypothetical problem
A corn farmer produces 300 sacks of corn at 50 kgs./sack.
Prevailing price of corn/sack is P1,200.
• He incurred the following annual expenses (P):
Fixed costs: land rent @5,000; irrigation fee@3,000; warehouse @2,500;
insurance @3,000; interest on loan @4,200; entrepreneuship@7,000;
salaries/wages@10,000; taxes@4,600; depreciation@2,600
Variable costs: seeds@5,000; fertilizer@10,500: labor@18,000;
pesticides@8,000; tractor@3,000; transportation,@3,500.
Compute for:
1. Total Cost, Total Fixed Cost, Total Variable Cost
2. Average total cost, average fixed cost, average variable cost
3. Total Revenue, average revenue
4. Total profit or Loss
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 30 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax