Economics 2281 · O Level · Firms' costs, revenue and objectives

Firms' costs, revenue and objectives — practice question

An entrepreneur purchases a workshop for $\$200\,000$ in order to produce 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 acquires 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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