Lorimar Watch Company Manufactures Travel Clocks

question 12

Short Answer

Lorimar Watch Company manufactures travel clocks. The daily marginal cost function associated with producing these clocks is
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where is measured in dollars/unit and x denotes the number of units produced. Management has determined that the daily fixed cost incurred in producing these clocks is $130. Find the total cost incurred by Lorimar in producing the first 500 travel clocks/day.
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$__________

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Definitions:

Production Increase

Production increase refers to the rise in the quantity of products manufactured or services rendered by a company over a specific period, aiming to meet higher demand or improve market share.

Sales Level

The quantity of goods or services sold or the amount of revenue generated from sales over a specific period.

Income Change

A variation in the amount of earnings generated by a business due to operations or other business activities over a specific period.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.