Selene owns a craft store.Her total costs are $1.2 million per year,and her variable costs are $750,000 per year.This means that her fixed costs are

Question

Quizplus · Accepted Answer

Fixed costs are the portion of total costs that do not change with the level of output or sales. In this case, Selene's total costs are $1.2 million per year, while her variable costs are $750,000 per year. Therefore, her fixed costs can be calculated by subtracting the variable costs from the total costs:

Fixed costs = Total costs - Variable costs 
Fixed costs = $1.2 million - $750,000 
Fixed costs = $450,000

Therefore, the fixed costs for Selene's craft store are $450,000.

Selene Owns a Craft Store