Question

Peter's birdhouse factory rents equipment for constructing birdhouses and hires new students. Peter pays $80 a day for equipment and $140 a day for each student hired. Construct Peters total variable cost and total cost schedules.

Answer 1

To calculate Peter's total variable cost, add the cost of renting equipment to the cost of hiring students. To calculate the total cost, add the fixed cost to the total variable cost.

Step-by-step explanation:

The total variable cost for Peter's birdhouse factory includes the cost of renting equipment and hiring new students. The cost of renting equipment is $80 per day, and the cost of hiring each student is $140 per day. To calculate total variable cost, we add these two costs together. For example, if Peter rents equipment for 4 days and hires 3 students, the total variable cost would be ($80 x 4) + ($140 x 3) = $320 + $420 = $740.

The total cost schedule is the sum of the fixed cost and the variable cost. The fixed cost is the cost that does not change regardless of production, which is $160. To calculate the total cost, we add the fixed cost to the total variable cost. For example, if the total variable cost is $740, the total cost would be $160 + $740 = $900.