Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dresses. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for electricity. Her total variable costs for the month are:
A) $8,000.
B) $4,000.
C) $32 per dress.
D) $7,500.

Question

Quizplus · Accepted Answer

Variable costs are those that change with the level of production. In this case, the variable costs are the wages, fabric and thread, and electricity. The total variable costs for the month are $6,000 + $1,500 + $500 = $8,000.

Barbara Owns a Small Shop Where Dresses Are Made