Question

Lamar, Inc., produces snow blowers. The total cost for the month of November is $104,000. During November, Lamar manufactured 325 snow blowers. If the variable cost for one snow blower is $184, what is the fixed cost for November?

a. $104,000
b. $98,300
c. $59,800
d. $44,200

Answer 1

The fixed cost for Lamar, Inc. for the month of November is calculated by subtracting the total variable cost of manufacturing 325 snow blowers from the total cost of $104,000. The total variable cost is $59,800 (325 snow blowers x $184 per snow blower), resulting in a fixed cost of $44,200.

Step-by-step explanation:

The question asks how to find the fixed cost for Lamar, Inc. for the month of November. Given that the total cost for the month is $104,000 and Lamar manufactured 325 snow blowers, with the variable cost being $184 per snow blower, we can calculate the fixed cost by subtracting the total variable costs from the total costs.

Firstly, we calculate the total variable costs by multiplying the number of snow blowers (325) with the variable cost per blower ($184), which equals $59,800. Then, we subtract the total variable costs from the total costs to get the fixed costs:

Fixed Cost = Total Cost - Total Variable Cost
Fixed Cost = $104,000 - $59,800
Fixed Cost = $44,200

Therefore, the fixed cost for Lamar, Inc. for the month of November is $44,200, which corresponds to option (d).