For Kellogg's Corn Flakes, we will assume the average cost is constant, so that the unit cost of a pound of cereal is equal to e2, regardless of the
quantity produced.
1. Draw the cost function (also called the total cost curve) for this case.
2. What do the marginal and average cost functions look like?
3. Now suppose that the marginal cost of producing a pound of Corn Flakes was e2, whatever the quantity,
but there were also some fi xed production costs. Draw the total, marginal, and average cost curves in this
case.

If jobs have been undercosted due to underallocation of manufacturing overhead, then cost of goods sold (cogs) is too low and which of the following corrections must be made? a. decrease cogs for double the amount of the underallocation b. increase cogs for double the amount of the underallocation c. decrease cogs for the amount of the underallocation d. increase cogs for the amount of the underallocation

Wisconsin snowmobile corp. is considering a switch to level production. cost efficiencies would occur under level production, and after tax costs would decline by $36,000, but inventory would increase by $300,000. wisconsin snowmobile would have to finance the extra inventory at a cost of 13.5 percent. a. determine the extra cost or savings of switching over to level production. should the company go ahead and switch to level production? b how low would interest rates need to fall before level production would be feasible?

What can be concluded from the data about the reliability and validity of the thermometers