Asked by Greyson Grubb on May 05, 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 43 statues is:
A) $10.
B) $20.
C) $40.
D) $43.
Variable Cost
Expenses that vary directly with production output.
Mud Statues
Sculptures made from mud or clay, often created as artistic or cultural items.
Loan
A borrowed amount of funds that needs to be returned along with additional interest charges.
- Assess the total, variable, and edge costs according to the supplied data.
Verified Answer
MM
Marilyn MejiaMay 08, 2024
Final Answer :
C
Explanation :
To produce 43 statues, you have to hire two workers, which will cost $20 ($10 per worker per day). Adding the $10 loan payment, the total cost will be $30. Therefore, the variable cost of producing 43 statues is $30 - the cost of producing 1 statue, which is $30/43. This gives us approximately $0.70 per statue. Multiplying by 43, we get a variable cost of approximately $30 - $0.70*43 = $9.90, which rounds up to $10. Therefore, the best choice is C: $40.
Learning Objectives
- Assess the total, variable, and edge costs according to the supplied data.
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