In the equation y = $7.20x + $790,
A)$250,250 are the total variable costs.
B)$250,250 are the total costs.
C)$250,250 are the total fixed costs.
D)$250,250 are the total overhead costs.

Question

Quizplus · Accepted Answer

In the equation y = $7.20x + $790, the $790 represents the fixed costs, while the $7.20x represents the variable costs (where x is the quantity produced). Therefore, the total fixed costs are $790, and the total variable costs are $7.20 times the quantity produced. None of the answer choices mention overhead costs, so option D can be eliminated. Option B is incorrect because it combines both fixed and variable costs into one total cost. Option A is incorrect because it only refers to the variable costs and doesn't include fixed costs. Therefore, the best choice is C, which correctly identifies the $250,250 as the total fixed costs.

In the Equation Y = $7.20x + $790