Question

Suppose a pizza parlor has the following production​ costs: ​$ in labor per​ pizza, ​$ in ingredients per​ pizza, ​$ in electricity per​ pizza, ​$ in restaurant rent per​ month, and ​$ in insurance per month. Assume the pizza parlor produces pizzas per month. What is the variable cost of production​ (per month)? The variable cost of production is ​$ nothing. ​(Enter your response as an​ integer.)

Answer 1

the variable cost of production​ (per month) is $21,000

Step-by-step explanation:

The computation is shown below:

The variable cost per month is

= Number of pizza produced per month × (labor per pizza + in ingredients per​ pizza + in electricity per​ pizza )

= 5,000 × ($3.00 + $1.00 + $0.20)

= 5,000 × $4.20

= $21,000

Hence, the variable cost of production​ (per month) is $21,000