Roger makes short films. After he rents his film equipment for $20,000, he cannot change that decision. It costs him $5,000 per film for editing, location expenses, and other expenses incurred for each film. What is his variable cost if he produces 10 films?

Question

Quizplus · Accepted Answer

Variable costs are costs that change with the level of output. Since it costs Roger $5,000 per film for various expenses, and he produces 10 films, the total variable cost is 10 films * $5,000/film = $50,000.

Roger Makes Short Films