Calculation of Average Costs with Economies of Scope Jewelry Designs

question 52

Multiple Choice

Calculation of Average Costs with Economies of Scope Jewelry Designs is considering a merger with Beads Supply Stores.Jewelry's total operating costs of producing services are $300,000 for sales volume of $2 million.Beads' total operating costs of producing services are $125,000 for a sales volume (J_P) of $2.25 million.Calculate the average cost of production for the Jewelry and Beads firms,respectively.

• A)15 percent, 5.56 percent
• B)5.56 percent, 15 percent
• C)15 percent, 55.56 percent
• D)13.33 percent, 6.25 percent