Asked by Brian Daniels on Sep 23, 2024
Verified
Which of these is a variable cost for a restaurant?
A) Rent for dining space
B) Insurance against damages on the rental space
C) Tax accountant's salary
D) Wages for the servers
Variable Cost
Expenses that change in proportion to the activity of a business such as production levels or sales volume.
Wages
Compensation received by employees for their labor, typically expressed as an hourly, daily, or piecework rate, or as an annual salary.
Servers
Computers or computer programs that provide data, resources, or services to other computers, known as clients, over a network.
- Understand the principles of variable, fixed, and total costs in the short-term framework and their impact on production choices.
Verified Answer
TW
Thomas Walsh5 days ago
Final Answer :
D
Explanation :
Wages for the servers are a variable cost because they are directly related to the amount of business the restaurant has. As the restaurant gets busier and serves more customers, it will likely need to hire additional servers and pay them more, which will increase the variable cost. The other options are fixed costs, which do not vary with the level of business. Rent, insurance, and salaries are all expenses that the restaurant will incur regardless of how many customers it serves.
Learning Objectives
- Understand the principles of variable, fixed, and total costs in the short-term framework and their impact on production choices.