Use the Following to Answer Question

question 87

Multiple Choice

Use the following to answer question:
-(Table: Cakes) Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer and bakes 400 cakes per day,what is her average total cost?

• A)$2.50
• B)$10
• C)$12.50
• D)$1,010

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services provided on credit.

Paper Company

A business entity created, often in a tax haven, for the purpose of managing investment or conducting transactions without engaging in operational business activities.

Interest Calculation

The process of determining the amount of interest earned or paid on a financial instrument or account, based on the principal, the rate, and the time.

Fair Value

The price that would be received for an asset if it were sold today.