A movie studio has some costs it incurs even if it produces no movies at all in a given year. Think of these as the costs of hav

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11 days ago

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A movie studio has some costs it incurs even if it produces no movies at all in a given year. Think of these as the costs of hav

ing an office and studio staffed with the minimum staff. As a consultant, you have obtained data about the studio's production costs. Unfortunately, you do not know what the fixed costs are. What you do know is that, after the studio produced one movie last year, the studio's total cost equaled $42 million. After the studio produced its second movie last year, the studio's total cost equaled $ 84 million. Finally, after the studio produced its third movie last year, the studio's total cost equaled $132 million.
Part 1 :Given the information above, you would know with certainty that, last year, the firm's variable costs were greater than or equal to $ million million, but less than $ 47 255
Part 2 : Suppose that, speaking to some of the accountants involved in the production of the first movie, you find out that the marginal cost of producing the first movie was $45 million. The firm's variable costs of producing all three movies last year are then $ 111 million.

Business

1 answer:

Katen [2.9K] · Answer 1 · 2026-03-25T17:18:29+03:00

Explanation:

Part 1: True, the information given about the total costs incurred by the movie studio from last year shows that after the adjustments for the differences in totals

3rd movie cost - 2nd = 132-84 = 48 million

Thus, the variable costs must be at least $47 million but less than $255 million as well.

Part 2: False, the marginal cost for producing the first movie was $45 million, while the studio produced three films during that period.

In conclusion, the variable costs for all three films last year were

45 x 3 = 135 million