The total cost of manufacturing metal bearings incurs a fixed cost of

Question

The total cost of manufacturing metal bearings incurs a fixed cost of $25,000 and a variable expense, which depends on the number of bearings manufactured. If for 50,000 bearings the total cost is $100,000, what is the total cost for 100,000 bearings?

(A) $125,000
(B) $150,000
(C) $175,000
(D) $200,000
(E) $275,000

(A) $125,000
(B) $150,000
(C) $175,000
(D) $200,000
(E) $275,000

stne · Answer

100,000  bearings will cost  200,000

There is also a fixed cost of  25,000

Hence total cost should be  225,000

chetan2u · Answer

stne , refer your report and reply. 
The options are correct.

Fixed expense: 25000

Cost of x bearings = 25000+xy, where y is the cost per bearing. 
Cost of 50000bearings = 25000+50000y=100000........50000y=75000
So, cost of 100000 or 2*50000 bearings = 25000+2*50000y=25000+2*75000=$175,000

C

LipiSinha · Answer

For 50,000 bearings the total cost is $100,000. 
Here, the fixed cost is $25,000. So, the variable cost = $75,000

We can see that the ratio of the variable cost to the number of bearings is 3/2 (75,000/50,000).

Therefore, the variable cost for 100,000 bearings will be 150,000. 
Now, taking the fixed cost also into account, the total cost of 100,000 bearings will be 25,000 + 150,000 = 175,000.

The answer will be C.

stne · Answer

Right, thank you , realized my mistake

So Variable cost for  50,000  bearings  100,000-25,000=75,000

So  50,000  cost  75,000  
1 bearing cost  \frac{75000}{50000} = \frac{3}{2}  ( Variable cost )

if 1 bearing cost  \frac{3}{2}  
100,000 cost =  \frac{3}{2}*100,000 = 150,000  ( variable cost )

Total cost for  100,000 = 150,000 +25000

175,000

Ans-C

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The total cost of manufacturing metal bearings incurs a fixed cost of

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