Economics 0455 · IGCSE · Firms’ costs, revenue and objectives

Firms’ costs, revenue and objectives — practice question

A entrepreneur purchases a workshop costing $200\,000 in order to produce plastic boxes. During the first year of trading, he pays $70\,000 for materials, hires ten production workers who are paid according to the quantity made (piece rate) at an overall cost of $80\,000, and acquires two delivery vehicles costing $10\,000 each. What is the total amount of his variable costs?

  • A$100\,000$
  • B$150\,000$
  • C$220\,000$
  • D$370\,000$

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