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Acme Home Builders, Inc

Accounting

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Acme Home Builders, Inc., has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?

a) For the first 24 houses, the average cost per house was $205,000,

b) The marginal cost of the 25th house, if it is built, will equal $250,000,

c) If the company can sell the 25th house for at least $202,000, then it should build it,

d) All of the above are correct.