A firm produces 200 units hourly with $150 in labor costs an hour, $80 in materials costs an hour, and a fixed cost that...

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Question

A firm produces 200 units hourly with $150 in labor costs an hour, $80 in materials costs an hour, and a fixed cost that...

A firm produces 200 units hourly with $150 in labor costs an hour, $80 in materials costs an hour, and a fixed cost that works out to $20 per hour.

First, what are this firm's hourly variable and total costs?

a. VC=$1.15, TC=$1.25

b. VC=$150, TC=$170

c. VC=$170, TC=$250

d. VC=$230, TC=$250

business economics

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Answer 1

Answer #1

Answer

Option d

d. VC=$230, TC=$250

Total cost =fixed cost +variable cost

variable cost =labor cost +material cost

=150+80

=$230

TC=20+230=$250

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Answer 2

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