# marginal cost

• Oct 26th 2008, 02:12 PM
littleone
marginal cost

A manufacturer of small glass figurines discovers that it cost \$2900 for a production run of 1300 and \$3200 for a production run of 1700. Assuming that cost is a linear function of the number of items, find the overhead and the marginal cost of a figurine.

• Oct 26th 2008, 11:43 PM
Tony2710
One neat way of doing this is to create an equation which looks like this:

total cost = (volume produced x unit cost) + overhead cost.

Then plug in the numbers for the volume produced and total cost from the question. You'll then have two equations that can be solved to find the unknowns that you need.
• Oct 31st 2008, 07:20 AM
littleone
Thanks so much!
• Oct 31st 2008, 08:17 AM
HallsofIvy
Quote:

Originally Posted by littleone

A manufacturer of small glass figurines discovers that it cost \$2900 for a production run of 1300 and \$3200 for a production run of 1700. Assuming that cost is a linear function of the number of items, find the overhead and the marginal cost of a figurine.