Question

Maria has a business printing t-shirts selling 200 t-shirts per month. Her monthly total fixed costs are $400, and her monthly total variable costs are $1,000. If for some reason Maria's fixed cost increased to $1,000, then her:

Answer 1

If Maria's fixed cost increased from $400 to $1,000, her total cost would increase from $1,400 to $2,000.

Step-by-step explanation:

If Maria's fixed cost increased from $400 to $1,000, her total fixed cost would increase by $600.

Total costs are the sum of fixed costs and variable costs. Since the variable costs remain the same at $1,000, the total costs would be $2,000 ($1,000 fixed costs + $1,000 variable costs).

Therefore, Maria's total costs would increase from $1,400 to $2,000 if her fixed cost increased to $1,000.

Answer 2

When Maria's fixed costs increased from $400 to $1,000, with variable costs steady at $1,000, her total monthly costs for printing 200 t-shirts rose from $1,400 to $2,000.

Step-by-step explanation:

Maria's business scenario is related to the concepts of fixed costs and variable costs, which are crucial for understanding cost structure in a business. Originally, Maria’s fixed costs for her t-shirt printing business were $400, and variable costs were $1,000, totaling $1,400 in combined costs for producing 200 t-shirts per month.

When her fixed costs increase to $1,000, while her variable costs remain the same, Maria's new total costs would amount to $2,000 ($1,000 fixed costs + $1,000 variable costs) for 200 t-shirts. This dramatic increase alters the cost dynamics of her operations, highlighting the importance of maintaining control over costs to ensure profitability.