Question

Granite Tops for You uses 15 units of capital at $5,000 per unit and employs 50 employees at a cost of $500 each. What is the company's variable cost?

Answer 1

$25,000

Step-by-step explanation:

Given that,

Units of capital used = 15

Per unit cost = $5,000

Number of Employees employed = 50

Cost of each employee = $500

In this question, the variable cost is the cost of employees.

Therefore,

Company's variable cost:

= Number of employees employed × Cost of each employee

= 50 × $500

= $25,000