Suppose a pizza parlor has the following production costs: $4.00 in labor per pi

Question

Suppose a pizza parlor has the following production costs: $4.00 in labor per pizza, $1.00 in ingredients per pizza, $0.70 in electricity per pizza, $1,500 in restaurant rent per month, and $550 in insurance per month Assume the pizza parlor produces 5.000 pizzas per month What is the variable cost of production (per month)? The variable cost of production is $square. (Enter your response as an integer.) What is the fixed cost of production(per month)? The fixed cost of production is $square. (Enter your response as an integer.)

Explanation / Answer

Variable cost per pizza =$ 4 + $ 1 + $ 0.70

Variable cost per pizza = $ 5.70

The variable cost of production per month = $ 5.70 X 5000

The variable cost of production per month = $ 28,500

Fixed cost of production per month = $ 1500 +$ 550

Fixed cost of production per month =$ 2,050

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