Manufacturing companies usually have two types of costs. Fixed
costs, sometimes called overhead, are costs that are not related to
the number of items manufactured. Fixed costs include things like
rent, a base level of utilities, and a base level of salaries and
must be paid even if the company does not make any products.
Variable costs depend on the number of items manufactured. Variable
costs include things like parts and raw materials for the products,
higher utilities, and higher salaries. As a manufacturing company
increases the number of items it produces, the fixed costs do not
change, but the variable costs increase. One company manufactures
high-end racing bicycles. The monthly fixed costs are $2405. The
total cost to manufacture 21 bikes is $21725. Assume that total
cost, C, is linearly related to the number of bicycles, x, that the
company manufactures. A) The cost function is: Remember to use
function notation. B) The total cost to manufacture 35 bikes is $
C) The cost to produce each additional bike is $