You manage a plant that mass-produces engines by teams of workers using assembly machines. The technology is summarized by the production function q  10 KL, where q is the number of engines per week, K is the number of assembly machines, and L is the number of labor teams. Each assembly machine rents for r  $5,000 per week, and each team costs w  $2500 per week. Engine costs are given by the cost of labor teams and machines, plus $2000 per engine for raw materials. Assume your plant has a fixed installation of 5 assembly machines as part of its design. (a) We get the total cost function is TC(q)=25000+2000q, what are average and marginal costs for producing q engines? How do average costs vary with output? (b) How many teams are required to produce 250 engines? What is the average cost per engine? (c) You are asked to make recommendations for the design of a new production facility. What capital/labor (K/L) ratio should the new plant accommodate if it wants to minimize the total cost of producing at any level of output q? (Hint: Here we no longer assume that K is fixed at 5. You need to find the combination of K and L that minimizes cost at any level of output q.)

Which of the following is a fixed cost for an automobile manufacturing plant?Group of answer choicesadministrative salarieselectricity used by assembly-line machinessales commissionstires

During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory:Direct materials $15,000Direct labor $30,000Manufacturing overhead $40,000What amount should be reported as cost of goods sold on the income statement if 5,000 units are produced and 4,000 are sold? $56,000 $68,000 $70,000 $85,000

A company produces batches of 1,500 units. Each batch requires 60 machine hours. The overhead is applied at a rate of $30 per machine hour. If the direct materials cost $3,000 and the direct labor costs $2,700 per batch, what is the total cost of the batch and the cost per unit?Question 17Answera.Total cost: $7,500, Cost per unit: $5b.Total cost: $7,200, Cost per unit: $4.80c.Total cost: $6,000, Cost per unit: $4d.Total cost: $6,500, Cost per unit: $4.33

The two steps to complete the production budget include: (Check all that apply.)Multiple select question.compute cost of materials purchasesenter materials cost per poundcompute total required unitscompute units to produce

In the past, four direct labor hours were required to produce each unit of product Y. Material costs were $200 per unit, the direct labor rate was $20 per hour, and factory overhead was three times direct labor cost. In budgeting for next year, management is planning to outsource some manufacturing activities and to further automate others. Management estimates these plans will reduce labor hours by 25%, increase the factory overhead rate to 3.6 times direct labor costs, and increase material costs by $30 per unit. Management plans to manufacture 10,000 units. What amount should management budget for cost of goods manufactured?