Question

A business incurs the following costs: Labor: $165/unitMaterials: $95/unitRent: $200,000/month Assume the firm produces 3 million units per month. The total variable cost, per month is $ ____ million. The total fixed cost, per month is $ ____ million. The total cost is $ ____ million.

Answer 1

Instructions are listed below

Step-by-step explanation:

Giving the following information:

A business incurs the following costs:

Labor: $165/unit

Materials: $95/unit

Rent: $200,000/month

Assume the firm produces 3 million units per month

Total variable costs= (direct labor + direct material)*units

Total variable cost= (165+95)*3million= $780,000,000

Total fixed cost= $200,000

Total cost= total fixed cost + total variable cost

Total cost= 200,000 + 780,000,000= $780,200,000