Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each
ID: 1163335 • Letter: V
Question
Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each of the following, determine if the cost represents a fixed cost or a variable cost of producing the wines.
The rent paid for the thousand acres on which the wine grapes are grown.
A. Variable cost.
B. Fixed cost.
Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each of the following, determine if the cost represents a fixed cost or a variable cost of producing the wines.
The workers who are hired and paid in the months of September and October to harvest the grapes from the vines. Fixed costs are those costs that do not change when output changes; that is, fixed costs are fixed (unchanged) regardless of the output level. Variable costs vary with the level of output.
A. Variable cost.
B. Fixed cost.
Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each of the following, determine if the cost represents a fixed cost or a variable cost of producing the wines.
The annual lease paid for the equipment that is used to wash and mash the grapes to make the wine (assume that the lease fee has already been paid). Fixed costs are those costs that do not change when output changes; that is, fixed costs are fixed (unchanged) regardless of the output level. Variable costs vary with the level of output.
A. Fixed cost.
B. Variable cost.
Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each of the following, determine if the cost represents a fixed cost or a variable cost of producing the wines.
The cost of transporting the wine from the winery to the retail stores that sell the wine.
A. Fixed cost.
B. Variable cost.
Volcano Winery produces white wines on the slopes of a Hawaii volcano. For each of the following, determine if the cost represents a fixed cost or a variable cost of producing the wines.
Explanation / Answer
1) fixed cost.
The rent paid for the thousand acres on which the wine grapes are grown is the fixed cost as the need of land and the need to pay rent remains constant despite the production quantity.
2) variable costs
As, the number of workers hired depends and varies with the level of output.
3) fixed cost.
Machinery comes under fixed cost as does not changes with the output level.
4) variable cost.
As, the transportation cost varies with the volume produced or the output level.
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