Use the following to answer question:
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 25 statues is:
A)$10.
B)$20.
C)$25.
D)$35.

Question

Use the following to answer question: 
-(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 25 statues is:
A)$10. 
B)$20. 
C)$25. 
D)$35.

Quizplus · Accepted Answer

The variable cost is the cost that changes with the level of output. In this case, the variable cost would be the cost of hiring workers to make the mud statues. Since each worker is paid $10 per day and you have 5 workers, the daily variable cost is $50. Therefore, the variable cost for producing 25 statues is $50, which when added to the fixed cost of $10 for the loan payment, makes the total cost $60. Thus, the correct answer is B.

Use the Following to Answer Question