Question

You are running a business that sells office supplies. Your monthly lease on the space is $3600. This past week, you sold 820 rulers for $1.25 each (they cost you $0.25 each), 900 reams of paper at for $7.99 per ream (they cost you $4 each), 172 computers at an average price of $674.99 (your cost: $497), and 86 printers at an average price of $109.95 (your cost: $89). Over the course of this week, you paid 4 part-time employees $8 per hour, and they each worked 20 hours. You also pay a full-time manager, who is on salary, $41,600 per annum. As it was back-to-school time, you ran a special flyer that cost you $1700 to print and deliver. Your electricity bill averages out to $758.33 per month, and you also employ the services of an accountant four times a year to manage books and do taxes, at a cost of $5400 per year. What are your total variable costs for the week?

Answer 1

Answer:

Computation of Total Variable cost per week:

Rulers: 820 * $ 0.25 = $ 205

Paper: 900 * $ 4 = $ 3,600

Computers: 172 * $ 497 = $ 85,484

Printers: 86 * $ 89 = $ 7,654

Total variable cost per week = $ 205 + $ 3,600 + $ 85,484 + $ $ 7,654 = $ 96,943

Rest of the expenses given in the question are of Fixed cost in nature. following are the Fixed cost items:-

Lease

Part-time employees salaries

Manager salary

Special Flyer cost

Electricity bill (operating expenses)

Accountant salary