Harbor Manufacturing Is Trying to Predict the Cost Associated with Producing

question 112

Multiple Choice

Harbor Manufacturing is trying to predict the cost associated with producing its anchors.At a production level of 4,000 anchors,Harbor Manufacturing's average cost per anchor is $50.00.If $20,000 of the total costs are fixed,what is the variable cost of producing each anchor?

• A)$ 5
• B)$ 50
• C)$ 45
• D)$180,000

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Definitions:

Efficiency Wages

Wages that an employer sets above the market equilibrium level to increase worker productivity and loyalty.

Above-Equilibrium

A situation where the price of a good or service is higher than the equilibrium price, leading to a surplus.

Private Businesses

Enterprises owned, controlled, and operated by private individuals or entities, aiming to generate profits.

Union Representation

The act of a labor union standing in for its members to negotiate employment terms, such as wages and working conditions, with employers.