Question

The Lamp Shop sells table lamps (as a pair) for $300. Last week, the Lamp Shop sold 10 lamps in a weekly promotional event. This even had total variable costs comprised of $95 for commission and $110 for total cost of goods. The Lamp Shop had a fixed cost of $2, 000. Please calculate the variable cost for the pair of table lamps.

Answer 1

The Lamp Shop's variable cost for a pair of table lamps is $20.50, calculated by summing the total variable costs and dividing by the number of pairs sold.

Step-by-step explanation:

To calculate the variable cost for a pair of table lamps sold by The Lamp Shop, we need to add the costs associated with commission and the total cost of goods. The Lamp Shop sold 10 pairs of table lamps for $300 each in a weekly promotional event. The total variable costs given were $95 for commission and $110 for the total cost of goods. Therefore, the total variable cost for 10 pairs of lamps is $95 (commission) + $110 (cost of goods) = $205.

To find the variable cost for one pair, we divide the total variable cost by the number of pairs sold: $205 / 10 = $20.50. Thus, the variable cost for a pair of table lamps is $20.50.