Tasty Beverage Co. produces soft drinks, specializing in fruit drinks. Tasty produces 4,100 cans of product per batch. Setup cost for each batch is $80 and each drink costs $0.10 to produce. a. What is the total cost per batch? b. How much would it cost to fill an order for 94,300 cans?

a.

Total cost per batch is $490

b.

The cost to fill in an order of 94300 cans will be $11270

Explanation:

The cost function for total cost per batch consists of a fixed cost of $80 for set up and a variable cost of $0.1 per unit. Thus, the cost equation for Total cost per batch is,

Let x be the number of units.

Total cost per batch = 0.1 * x + 80

a.

One batch can produce a maximum of 4100 cans.

Total cost per batch = 0.1 * 4100 + 80   =  $490 per batch

b.

To fill in an order of 94300 cans, we require the following number of batches.

Number of batches required = 94300 / 4100 = 23 batches

Total cost for 23 batches = 23 * 490 = $11270

Total cost per batch = $490

Total Cost of  the order   =  $11,270

Explanation:

a)

Total cost per batch

= Set cost per batch + cost per unit × units in a batch

=  $80 + ($0.10  × 4,100) =

=  $490

b)

Cost of an order for 94,300 cans

94,300 cans = 94,300/4,100  batches

                      = 23 batches

Total Cost of  the order = 23 × $490

                                 =  $11,270

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