Asked by Leston Alexis on Apr 27, 2024
Verified
Refer to Scenario 9.3. Total cost per week is
A) $1,000.
B) $1,600.
C) $2,000.
D) $3,600.
Total Cost
The sum of all costs incurred in the production of goods or services, including fixed and variable costs.
Variable Costs
Costs that change directly in proportion to changes in the level of production or activity within a business.
Fixed Costs
Costs that do not change with the level of output or production, such as rent, salaries, or loan payments.
- Investigate instances to gauge the commercial income, operational costs, and economic gains or losses.
Verified Answer
NW
Nyanda Walker-PottsMay 03, 2024
Final Answer :
D
Explanation :
To calculate the total cost per week, we need to consider both fixed and variable costs. The fixed costs include the 10% return on the $520,000 investment and $1,000 per week in other fixed costs. The 10% return on the investment is $52,000 per year ($520,000 * 10%). When prorated weekly, this is $1,000 per week ($52,000 / 52 weeks). Adding the other fixed costs of $1,000 per week gives us total fixed costs of $2,000 per week. The variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc., totaling $1,600. Adding the fixed and variable costs together ($2,000 + $1,600) gives us a total cost per week of $3,600.
Learning Objectives
- Investigate instances to gauge the commercial income, operational costs, and economic gains or losses.