Play Time is a nursery school for pre-kindergarten children. The school has determined that the following biweekly revenues and costs occur at different levels of enrollment:Number of StudentsEnrolled Total Revenue Total Costs10 $4,300 $2,400 15 6,450 3,100 16 6,880 3,200 20 8,600 3,850 21 9,030 3,935 What is the marginal cost when the twenty-first student enrolls in the school?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Play Time is a nursery school for pre-kindergarten children. The school has determined that the following biweekly revenues and costs occur at different levels of enrollment:

Number of Students Enrolled	Total Revenue		Total Costs
10	$	4,300		$	2,400
15		6,450			3,100
16		6,880			3,200
20		8,600			3,850
21		9,030			3,935

What is the marginal cost when the twenty-first student enrolls in the school?

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In managerial accounting, the idea of marginal cost is crucial as it used to maximize the production through the economies of scale. By producing at the point where marginal cost equals marginal revenue, the business entities can optimize its earnings.

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