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Auto X firm spent $300 million in total to produce 40 000 cars this year....

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Finance

Auto X firm spent $300 million in total to produce 40 000 cars this year. The breaks down of $300 milion as follows: The company spent $50 million on fixed costs to run its manufacturing plants and $5000 of variable costs to produce each car. Next year assuming that, fixed costs and variable costs will increase 10%. It plans 50 000 cars. a-What is the current average cost per car this year? b- What is the total forcasted cost to produce 50 000 cars next year? c- What is the forcasted average cost per car next year? d- What does the average cost per car vary between years?

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