Kaplan BU224 Unit 8 Assignment

1.
Unless specified differently by your course instructor, save this assignment
template to your computer with the following file naming format:
Course
number_section number_LAST_FIRST_ unit number

2. At the top of the template, insert the
appropriate information: Your Name, Course Number, Section Number and Date

3.
Insert your answers below, or in the appropriate space provided for in the
question. Your answers should follow the
APA format with citations to your sources and, at the bottom of your last page,
a list of references. Your answers should also be in Standard English with
correct spelling, punctuation, grammar, and style (double spaced, in Times New
Roman, 12-point, black font). Respond to
questions in a thorough manner, providing specific examples of concepts,
topics, definitions, and other elements asked for in the questions.

4. Provide a list of references at the end of
the last page of your assignment.

5.
Upload the completed assignment to the appropriate dropbox.

6.
Any questions about the assignment, or format questions, should be directed to your
course instructor.
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Career Competencies —————————————–

In
this assignment, you will engage in developing the following career
competencies:

Analyzing
Quantitative Data

——————————————- Assignment ——————————————-

The
accompanying table shows a boat manufacturer’s total cost of producing boats.

Quantity of Boats

Total Cost

0

$
450,000

1

$
490,000

2

$
510,000

3

$
520,000

4

$
540,000

5

$
570,000

6

$
610,000

7

$
670,000

8

$
750,000

9

$
870,000

1. What is this
manufacturer’s fixed cost?

2. For each
level of output, calculate the variable cost (VC). For each level of
output except zero output, calculate the average variable cost (AVC),
average total cost (ATC), and average fixed cost (AFC).

Qty of boats

Total Cost

Variable
Costs
a.

Average
Variable Costs
b.

Average
Total Costs
c.

Average
Fixed Cost
d.

0

$450,000

–

–

–

–

1

490,000

2

510,000

3

520,000

4

540,000

5

570,000

6

610,000

7

670,000

8

750,000

9

870,000

3. What is the
minimum-cost output?

4. Joe Brown’s dairy operates in a
perfectly competitive marketplace. Joe’s machinery costs $500 per day and is
the only fixed input. His variable costs are comprised of the wages paid to the
few workers he employs at the dairy and the grain he feeds to his dairy cows.
His cost structure is shown on the accompanying table

Gallons of Milk

FC

VC

TC

MC

AVC

ATC

0

$500

–

$500

–

–

–

1000

500

$2,100

2,600

$2.10

$2.10

$2.60

2000

500

$2,200

2,700

$0.10

$1.10

$1.35

3000

500

$2,900

3,400

$0.70

$0.97

$1.13

4000

500

$3,680

4,180

$0.78

$0.92

$1.05

5000

500

$5,180

5,680

$1.50

$1.04

$1.14

4. a. What is
the break-even price?

4. b. What is the shut-down price?

4. c. If the market price of milk is $1.50 per gallon,
will Joe make a profit? Explain.

4.
d. If the market price of milk is $1.50 per gallon, should Joe continue to
produce in the short run? Explain.

4. e. If the market price of milk is $1.00 per gallon,
will Joe make a profit? Explain.

4.
f. If the market price of milk is $1.00 per gallon, should Joe continue to
produce in the short run? Explain.

4. g. If the market price of milk is $0.75 per gallon,
will Joe make a profit? Explain.

4.
h. If the market price of milk is $0.75 per gallon, should Joe continue to
produce in the short run? Explain.

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References: