Darren runs a barbershop with average fixed costs of $60 per day and a total output of 50 haircuts per day. Darren shuts down every year during the last week of July and the first week of August. What is his annual fixed cost if he is open six days per week?
A) $18,000
B) $3,000
C) $60
D) The answer cannot be determined with the information available.

Question

Quizplus · Accepted Answer

Darren's barbershop is open for 50 weeks a year (52 weeks minus 2 weeks closed), and 6 days per week, which totals 300 days. With average fixed costs of $60 per day, the annual fixed cost is 300 days * $60/day = $18,000.

Darren Runs a Barbershop with Average Fixed Costs of $60