Asked by Jalon Lipford on Jul 27, 2024
Verified
(Table: Workers and Output) Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 25 statues is:
A) $10.
B) $20.
C) $25.
D) $35.
Variable Cost
Costs that change in proportion to the level of activity or production volume.
Mud Statues
Sculptures made out of mud or clay, often used in various cultures for artistic or ceremonial purposes.
Workers
Individuals engaged in any form of economic activity to earn a living, including both paid and unpaid efforts.
- Compute the mean fixed, variable, and cumulative expenses using particular data.
Verified Answer
EP
Ellie PetersonAug 01, 2024
Final Answer :
B
Explanation :
The variable cost is the cost that changes with the level of output. In this case, the variable cost would be the cost of hiring workers to make the mud statues. Since each worker is paid $10 per day and you have 5 workers, the daily variable cost is $50. Therefore, the variable cost for producing 25 statues is $50, which when added to the fixed cost of $10 for the loan payment, makes the total cost $60. Thus, the correct answer is B.
Learning Objectives
- Compute the mean fixed, variable, and cumulative expenses using particular data.