Please see attached homework assignment

Please see attached homework assignment
Mike is considering opening a shop to make bookcases. Before doing that, he needs to estimate the cost information for the first through the eighth bookcases (his estimated maximum monthly output). Calculate his costs in a table like t he one shown below. Remember that you cannot calculate the average costs for an output level of zero because you cannot divide by zero. Also there will be no marginal costs for zero, because there is no “extra” output if there is no output. a) The first bookcase costs $620 to produce. Of the $620, $210 is his fixed costs. b) As he starts making bookcases, the additional bookcases have the following ADDITIONAL variable expenses: 2nd, $150; 3rd, $120; 4th, $110; 5th, $125; 6th, $140; 7 th, $175; 8th, $200. Quantity Total Fixed Cost Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 0 —- —- —- —- 1 $620 2 3 4 5 6 7 8 Now you are to calculate some measures of profits in Mike’s business for two possible output levels, 4 and 7 bookcases. Assume that the bookcases sell for $800 each and that the tax rate is 30%. TR = Price x Quantity Gross profit = Total Revenue – Total Costs Taxes = GP x Tax Rate Net profit = GP – Taxes Qty Total Revenue Total Cost Gross Profit Taxes Net Profit 4 7 YOUR NAME: