Calculation of Average Costs with Economies of Scope Crib World

question 107

Multiple Choice

Calculation of Average Costs with Economies of Scope Crib World is considering a merger with Tots Supply Stores.Crib's total operating costs of producing services are $250,000 for sales volume of $1.25 million.Tots' total operating costs of producing services are $210,000 for a sales volume (J_P) of $900,000.Calculate the average cost of production for the Crib and Tots firms,respectively.

• A)20 percent, 23.33 percent
• B)23.33 percent, 20 percent
• C)27.78 percent, 16.8 percent
• D)21.4 percent, 21.4 percent

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