A firm produces 1000 units per week. It hires 10 fulltime workers (40 hours/week

Question

A firm produces 1000 units per week. It hires 10 fulltime workers (40 hours/week) at an hourly wage of $20. Raw materials are ordered weekly and they costs $5 for every unit produced. The weekly cost of the rent payment for the factory is $1,500. How do the overall costs breakdown for the week? a) total variable cost is $5,000; total fixed cost is $1,500; total cost is $6,500 b) total variable cost is $5,000; total fixed cost is $9,500; total cost is $14,500 c) total variable cost is $13,000; total fixed cost is $1,500; total cost is $14,500 d) total variable cost is $13,000; total fixed cost is $9,500; total cost is $22,500

Explanation / Answer

Wages = 10*40*20 = $8000

Raw Material = 5*1000 = $5000

Variable costs = 8000+5000 = $13000

Fixed Cots (Rent) = $1500

Total Costs = FC+VC = 13000+1500 = $14500

Therefore the correct option is C. total variable cost is $13,000; total fixed cost is $1,500;

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.