Suppose Bev's Bags makes large and small handbags. Bev rents an industrial space where she keeps the company's fabric, industrial sewing machine, measuring board, cutting shears, extra needles, thread, buttons, and labels. Bev can produce three bags an hour, regardless of the size of the bag. If Bev produces no bags, which of the following is true regarding Bev's costs?
A) The variable cost of fabric would drop to zero.
B) The fixed cost of thread would stay the same.
C) The variable cost of cutting shears would drop to zero.
D) All of these are correct.
Correct Answer:
Verified
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