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

Firms’ costs, revenue and objectives — practice question

An entrepreneur purchases a workshop for $200\,000 in order to manufacture plastic boxes. During the first year of trading, he spends $70\,000 on materials, hires ten production workers who are paid according to output (piece rate) at a total cost of $80\,000, and purchases two delivery vehicles costing $10\,000 each. What are his total variable costs?

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

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