Cost Functions – Knowsia

QTB – May 2016 – L1 – SB – Q1b – Mathematics

Draw cost graph, estimate production units, deduce fixed costs and cost equation for an aluminum manufacturing company.

Question

An aluminum manufacturing company in Lagos incurs a daily total cost of N5,000 for one unit of production. To produce 4 units, the company spends N30,000 as its total cost.

Required:

i. Draw a graph to depict the above information.
(3 marks)

ii. Use your graph above to estimate the number of units to be produced to incur a total cost of N70,000.
(2 marks)

iii. Deduce

The daily fixed costs of the company from the graph above (1 mark)
From the above, obtain the equation representing the company’s activity (3 marks)

iv. Comment on the results obtained in (iii) above.
(1 mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Analysis, Cost Functions, Fixed Costs, Graphing
Level: Level 1

Topic: Mathematics
Series: MAY 2016

QT – May 2016 – L1 – Q5a – Mathematics of Business Finance

Calculate the total cost, average cost, and marginal cost of producing 5000 items, and determine the production level for the lowest average cost.

Question

a) If the total cost (in Ghana cedis) of producing $x$ items is given by the function

Required:
i) Calculate the total cost, average cost, and marginal cost of producing 5000 items. (6 marks)
ii) Determine the production level at which the average cost will be the lowest. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Average Cost, Cost Functions, Marginal Cost, Optimization
Level: Level 1

Topic: Mathematics of Business Finance
Series: MAY 2016

QTB – May 2016 – L1 – SB – Q1b – Mathematics

Draw cost graph, estimate production units, deduce fixed costs and cost equation for an aluminum manufacturing company.

Question

An aluminum manufacturing company in Lagos incurs a daily total cost of N5,000 for one unit of production. To produce 4 units, the company spends N30,000 as its total cost.

Required:

i. Draw a graph to depict the above information.
(3 marks)

ii. Use your graph above to estimate the number of units to be produced to incur a total cost of N70,000.
(2 marks)

iii. Deduce

The daily fixed costs of the company from the graph above (1 mark)
From the above, obtain the equation representing the company’s activity (3 marks)

iv. Comment on the results obtained in (iii) above.
(1 mark)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Analysis, Cost Functions, Fixed Costs, Graphing
Level: Level 1

Topic: Mathematics
Series: MAY 2016

QT – May 2016 – L1 – Q5a – Mathematics of Business Finance

Calculate the total cost, average cost, and marginal cost of producing 5000 items, and determine the production level for the lowest average cost.

Question

a) If the total cost (in Ghana cedis) of producing $x$ items is given by the function

Answer

Find Related Questions by Tags, levels, etc.

Tags: Average Cost, Cost Functions, Marginal Cost, Optimization
Level: Level 1

Topic: Mathematics of Business Finance
Series: MAY 2016

Question Tag: Cost Functions

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QTB – May 2016 – L1 – SB – Q1b – Mathematics

Draw cost graph, estimate production units, deduce fixed costs and cost equation for an aluminum manufacturing company.

QT – May 2016 – L1 – Q5a – Mathematics of Business Finance

Calculate the total cost, average cost, and marginal cost of producing 5000 items, and determine the production level for the lowest average cost.

QTB – May 2016 – L1 – SB – Q1b – Mathematics

Draw cost graph, estimate production units, deduce fixed costs and cost equation for an aluminum manufacturing company.

QT – May 2016 – L1 – Q5a – Mathematics of Business Finance

Calculate the total cost, average cost, and marginal cost of producing 5000 items, and determine the production level for the lowest average cost.

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