Table 11-9 -Refer to Table 11-9. Clock It to Me Manufactures Clock

question 10

Essay

Table 11-9

-Refer to Table 11-9. Clock It To Me manufactures clock radios. The table above shows estimates of fixed cost per period and average variable cost for three possible plant sizes.
a. You are employed as the company's cost accountant and have been asked to prepare cost estimates for various output levels for each of the three possible plant sizes. Record your calculations in the table below.
Average Cost of Production
b. For each of the three output levels, which plant size will generate the lowest average total cost of production?
c. Suppose the firm currently sells 8,000 clock radios per period (using the optimal plant size for this output level). Now, however, it has just secured a long-term contract to supply 20,000 clock radios per period. In the short run, what is the average total cost of producing 20,000 clock radios? Provide a numerical value based on your answer in part a.
d. What happens to average total cost of production in the long run? Provide a numerical value based on your answer in part a.

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Definitions:

In-person Interactions

Social exchanges that occur face-to-face, allowing for direct communication and physical presence.

Sensorimotor Substage

The earliest developmental stage in Piaget's theory of cognitive development, spanning from birth to approximately two years of age, focusing on physical interaction and exploration of the environment.

Secondary Circular Reactions

A Piagetian developmental stage in which infants repeat pleasing actions with their bodies and manipulable objects.

Tertiary Circular Reactions

Advanced repetitive behaviors in infants where they experiment with new variations of actions to see outcomes, indicating cognitive development.