In 2011, the fixed costs of a company were $500,000, and its variable costs equalled $150,000. In 2010, the company made an annual profit of $200,000. It has been predicted that, despite a steady growth, the company's variable costs will likely equal $300,000 by 2013. The total costs of the company in 2011 were ________.
A) $350,000
B) $450,000
C) $650,000
D) $800,000
E) $950,000

Question

Quizplus · Accepted Answer

Total costs = fixed costs + variable costs
In 2011: 
Total costs = $500,000 + $150,000 = $650,000
In 2013 (predicted):
Total costs = $500,000 + $300,000 = $800,000

Therefore, the total costs in 2011 were $650,000.

In 2011, the Fixed Costs of a Company Were $500,000