Labor (workers) Output (bikes) Total fixed costs (dollars) Total variable cost (
ID: 2440953 • Letter: L
Question
Labor (workers)
Output (bikes)
Total fixed costs (dollars)
Total variable cost (dollars)
Total cost (dollars)
0
0
180
1
20
75
2
50
3
60
4
64
The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $75 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?
Labor (workers)
Output (bikes)
Total fixed costs (dollars)
Total variable cost (dollars)
Total cost (dollars)
0
0
180
1
20
75
2
50
3
60
4
64
Explanation / Answer
Answer: $225
Each worker is paid $75 a day.
When producing 60 bikes 3 labors are required. Hence the total labor cost = $75*3 = $225.
Since the labor costthe is only variable cost, the total variable cost is $225.
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