Lauren is the owner of a bakery. Last year, her total revenue was $145,000, her
ID: 2431002 • Letter: L
Question
Lauren is the owner of a bakery. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. If she could earn $53,000 working for another bakery nearby, we know that her economic profit was A) $53,000. B) $65,000 ? C)$0. D) $145,000. Save Question 18 (1 point) Darrell owns a furniture store. His total costs are $225,000 per year, and his variable costs are $75,000 per year. This means that his fixed costs are: A) $300,000. B) $75,000. C) $150,00o. D) $225,000. Save Saved Question 19 (1 point)Explanation / Answer
Lauren's economic profit = Total revenue - Rent - Labor cost - Overhead epenses - Imputed salary of Lauren
= 145,000 - 12,000 - 65,000 - 15,000 - 53,000
= $0
Hence, correct option is (C)
(18)
Total cost = Total variable cost + Total fixed cost
225,000 = 75,000 + Total fixed cost
Hence, Total fixed cost = 225,000 - 75,000
= $150,000
Hence, correct option is (C)
(19)
Average total cost = Total cost/Number of bikes produced
= 1,200,000/1,200
= $1,000
Hence, correct option is (D)
(21)
Total cost can be calculated in the following ways:
Total cost = Total variable cost + Total fixed cost
Total cost = Average total cost x Quantity produced
Total cost = (Average fixed cost + Average variable cost) x Quantity produced
But, Total cost is not equal to total profit plus total revenue
Hence, correct option is (B)
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