The Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7 comma 700 bats to be $ 14. If $ 22 comma 500 of the costs are fixed, and the plant manager uses the cost equation to predict total costs, her forecast for 8 comma 600 bats will be (Round any intermediary calculations to the nearest cent.)

Explanation:

Assume the cost equation to be:

Where is the number of units (wooden baseball bats) produced.

The average cost per unit of production level is the total cost divided by the number of units produced:

You are given that the average cost per unit of a production level of 7,700 bats is $14, then:

You are also given that the fixed costs are $22,500, thus A = 22,500. Hence, you can substitute the value of A in the previous equation and find B:

Now you can complete the cost equation:

And to predict the total costs for 8,600 bats you must subsitute x with 8,600 in the previous equation:

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