COST FIXED COST INPUTS:

SCHEDULE
(TABLE 1) SPACE RENTAL (INCLUDING
WATER AND ELECTRIC BILL)
LEVEL OF TOTAL TOTAL TOTAL
=
OUTPUT FIXED VARIABLE COST 20,000
COST COST PESOS
(Q) (TFC) (TVC) (TC)
EQUIPMENTS =
20,000 PESOS
0 82,000 O -
TABLE AND CHAIRS =
50 82,000 35,000 117,000 2,500 PESOS
60 82,000 35,100 117,100 AIRCON =
70 82,000 35,200 117,200 9,000 PESOS
80 82,000 36,000 118,000
DESIGN PORTFOLIO =
1,000 PESOS
90 82,000 36,100 118,100
PRESONAL COMPUTER =
100 82,000 36,200 118,200 50,000 PESOS
110 82,000 37,000 119,000 TOTAL =
115 82,000 40,000 122,000 82,000 PESOS
120 82,000 45,000 127,000
COST VARIABLE
122 82,000 47,000 129,000
125 82,000 50,000 132,000 WAGE =
130 82,000 60,000 142,000 5,000 PESOS
150 82,000 70,000 152000 RAW MATERIALS =
30,000 PESOS
200 82,000 80,000 162000
TOTAL =
300 82,000 90,000 172000 35,000 PESOS
400 82,000 100,000 182000
420 82,000 100,100 182100 CALCULATIONS
422 82,000 100,200 182200
TOTAL COST = TVC + TFC
425 82,000 100,300 182300
Now for my variable as my
250 82,000 80,000 162000 output increases my
variable also increases
except in output 250
because the number of
costumer decreases.
AVERAGE
COST AFC = FIXED COST OF
(TABLE 2) OUTPUT
LEVEL OF TOTAL TOTAL TOTAL AVERAGE AVERAGE AVERAGE AVC = TVC / OUTPUT
ATC = AFC + AVC
OUTPUT FIXED VARIABLE COST FIXED VARIABLE TOTAL

COST COST COST COST COST

(Q) (TFC) (TVC) (TC) (AFC) (AVC) (ATC)

0 82,000 O 82,000 0 0 0
50 82,000 35,000 117,000 1,640 700 2340
60 82,000 35,100 117,100 1,366.60 585 1,951
70 82,000 35,200 117,200 1,171 502 1,674
80 82,000 36,000 118,000 1,025 450 1,475
90 82,000 36,100 118,100 911.1 401 1,312
95 82,000 36,200 118,200 863 381 1,244
100 82,000 37,000 119,000 820 370 1,190
115 82,000 40,000 122,000 713 347 1,060
120 82,000 45,000 127,000 683 375 1,058
122 82,000 47,000 129,000 672 385 1,057
125 82,000 50,000 132,000 656 400 1,056
130 82,000 60,000 142,000 630 461 1,092
150 82,000 70,000 152000 546.6666667 466.6666667 1013.333333
200 82,000 80,000 162000 410 400 810
300 82,000 90,000 172000 273.3333333 300 573.3333333
400 82,000 100,000 182000 205 250 455
420 82,000 100,100 182100 195.2380952 238.3333333 433.5714286
422 82,000 100,200 182200 194.3127962 237.4407583 431.7535545
425 82,000 100,300 182300 192.9411765 236 428.9411765
250 82,000 80,000 162000 328 320 648
MARGINAL
COST
(TABLE 3)
LEVEL OF TOTAL TOTAL TOTAL AVERAGE AVERAGE AVERAGE MARGINAL

OUTPUT FIXED VARIABLE COST FIXED VARIABLE TOTAL COST

COST COST COST COST COST

(Q) (TFC) (TVC) (TC) (AFC) (AVC) (ATC) (MC)

0 82,000 O 82,000 0 0 0 0
50 82,000 35,000 117,000 1,640 700 2340 700
60 82,000 35,100 117,100 1,366.60 585 1,951 10
70 82,000 35,200 117,200 1,171 502 1,674 10
80 82,000 36,000 118,000 1,025 450 1,475 80
90 82,000 36,100 118,100 911.1 401 1,312 10
95 82,000 36,200 118,200 863 381 1,244 20
100 82,000 37,000 119,000 820 370 1,190 160
115 82,000 40,000 122,000 713 347 1,060 200
120 82,000 45,000 127,000 683 375 1,058 1,000
122 82,000 47,000 129,000 672 385 1,057 1,000
125 82,000 50,000 132,000 656 400 1,056 1,000
130 82,000 60,000 142,000 630 461 1,092 2,000
150 82,000 70,000 152000 546.6666667 466.6666667 1013.333333 500
200 82,000 80,000 162000 410 400 810 200
300 82,000 90,000 172000 273.3333333 300 573.3333333 100
400 82,000 100,000 182000 205 250 455 100
420 82,000 100,100 182100 195.2380952 238.3333333 433.5714286 5
422 82,000 100,200 182200 194.3127962 237.4407583 431.7535545 50
425 82,000 100,300 182300 192.9411765 236 428.9411765 33.33333333
250 82,000 80,000 162000 328 320 648 116

MC = ( TC2 - TC2 )
( Q2 - Q1 )
REVENUE TR = P X Q
(TABLE 4) Where P = price (500 Pesos)
LEVEL OF TOTAL TOTAL TOTAL TOTAL MARGINAL Multiply by output (Q)
Where Q is the number of
OUTPUT FIXED VARIABLE COST REVENUE REVENUE
customers per month
COST COST

(Q) (TFC) (TVC) (TC) (TR) (MR) MR = is the extra income in

0 82,000 O 82,000 0 0 a price of 500 and output of
50 82,000 35,000 117,000 25,000 25,000
50, multiply 500 by 50 MR =
25,000 pesos for the second
60 82,000 35,100 117,100 30,000 5,000
month the output increases
70 82,000 35,200 117,200 35,000 5,000 to 60 so the extra income is
80 82,000 36,000 118,000 40,000 5,000 10, then multiply 10 by 500
90 82,000 36,100 118,100 45,000 5,000 to get the marginal revenue
95 82,000 36,200 118,200 47,500 2,500
(MR) for the 2nd output.
100 82,000 37,000 119,000 50,000 2,500
115 82,000 40,000 122,000 57,500 7,500
120 82,000 45,000 127,000 60,000 2,500
122 82,000 47,000 129,000 61,000 1,000
125 82,000 50,000 135,000 65,000 4,000
130 82,000 60,000 142,000 65,500 2,500
150 82,000 70,000 152000 75000 10000
200 82,000 80,000 162000 100000 25,000
300 82,000 90,000 172000 150000 50,000
400 82,000 100,000 182000 200000 50,000
420 82,000 100,100 182100 210000 10,000
422 82,000 100,200 182200 211000 1,000
425 82,000 100,300 182300 212500 1500
250 82,000 80,000 162000 125000 87,000
PROFIT At the output of 0 –
(TABLE 300 the profit of my
5) business is negative, so I
LEVEL OF TOTAL TOTAL TOTAL TOTAL MARGINAL PROFIT need to add more output to
make my profit positive. At
OUTPUT FIXED VARIABLE COST REVENUE REVENUE
the output of 400 my profit
COST COST
has now become positive, so
(Q) (TFC) (TVC) (TC) (TR) (MR) (P) I need to continue adding
0 82,000 O 82,000 0 0 -82,000 outputs to know what is my
50 82,000 35,000 117,000 25,000 25,000 -92,000
limit in my profit. Now at the
output of 250 my profit gets
60 82,000 35,100 117,100 30,000 5,000 -87100
back to negative so I need to
70 82,000 35,200 117,200 35,000 5,000 -82200 stop and, therefore my
80 82,000 36,000 118,000 40,000 5,000 -78000 biggest profit is at the
90 82,000 36,100 118,100 45,000 5,000 -73100 output of 425 which has a
95 82,000 36,200 118,200 47,500 2,500 -70700
profit of 30,200 pesos.
100 82,000 37,000 119,000 50,000 2,500 -69000
115 82,000 40,000 122,000 57,500 7,500 -64500
120 82,000 45,000 127,000 60,000 2,500 -67000
122 82,000 47,000 129,000 61,000 1,000 -68000
125 82,000 50,000 132,000 62,500 1,500 -69500
130 82,000 60,000 142,000 65,000 2,500 -77000
150 82,000 70,000 152000 75000 10000 -77000
200 82,000 80,000 162000 100000 25,000 -62000
300 82,000 90,000 172000 150000 50,000 -22000
400 82,000 100,000 182000 200000 50,000 18000
420 82,000 100,100 182100 210000 10,000 27900
422 82,000 100,200 182200 211000 1,000 28800
425 82,000 100,300 182300 212500 1500 30200
250 82,000 80,000 162000 125000 87,000 -37000
TOTAL
COST-
TOTAL
REVENUE
APPROACH
(TABLE 6)
LEVEL OF TOTAL TOTAL MARGINAL PROFIT

OUTPUT REVENUE COST REVENUE

(Q) (TR) (TC) (MR) (P)

0 0 82,000 0 -82,000
50 25,000 117,000 25,000 -92,000
60 30,000 117,100 5,000 -87100
70 35,000 117,200 5,000 -82200
80 40,000 118,000 5,000 -78000
90 45,000 118,100 5,000 -73100
95 47,500 118,200 2,500 -70700
100 50,000 119,000 2,500 -69000
115 57,500 122,000 7,500 -64500
120 60,000 127,000 2,500 -67000
122 61,000 129,000 1,000 -68000
125 62,500 132,000 1,500 -69500
130 65,000 142,000 2,500 -77000
150 7500 7650 10000 -77000
200 100000 100200 25,000 -62000
300 150000 150300 50,000 -22000
400 200000 200400 50,000 18000
420 210000 210420 10,000 27900
422 211000 211422 1,000 28800
425 212500 212925 1500 30200
250 125000 125250 87,000 -37000
MARGINAL
COST-
MARGINAL
REVENUE
APPROACH
(TABLE 7)
LEVEL OF MARGINAL MARGINAL PROFIT

OUTPUT COST REVENUE

(Q) (MC) (MR) (P)

0 0 0 -82,000
50 700 25,000 -92,000
60 10 5,000 -87100
70 10 5,000 -82200
80 80 5,000 -78000
90 10 5,000 -73100
95 20 2,500 -70700
100 160 2,500 -69000
115 200 7,500 -64500
120 1,000 2,500 -67000
122 1,000 1,000 -68000
125 1,000 1,500 -69500
130 2,000 2,500 -77000
150 500 10000 -77000
200 200 25,000 -62000
300 100 50,000 -22000
400 100 50,000 18000
420 5 10,000 27900
422 50 1,000 28800
425 33.33 1500 30200
250 116 87,000 -37000