Question

Barbara owns a small shop where dresses are made. At the end of a given month, she has 250 dress. Her expenses for the month are $1,000 for rent, $6,000 for wages, $1,500 for fabric and thread, and $500 for elextricity. Her total variable costs for the month are:________.

A) c and e.

B) $4,000.

C) $32 per dress.

D) $7,500.

E) $8,000.

Answer 1

The correct answer is option (D).

Step-by-step explanation:

According to the scenario, computation of the given data are as follows:

Rent (Fixed cost) = $1,000

Wages (variable cost )= $6,000

Fabric and thread (variable cost)= $1,500

Electricity (Fixed cost )= $500

So, we can calculate the total variable cost by using following formula:

Total variable cost = Wages + Fabric and thread cost

= $6,000 + $1,500

= $7,500