Costs - Fixed and Variable

Sutton Ltd produces teddy bears. Each month, their rent and insurance totals $20,000. The variable costs per teddy bear are $1.50.

What are the total fixed costs if they produce 35,000 teddy bears?

• $10,000

• $20,000

• $30,000

• $40,000

Backhouse Ltd produces golf balls. Each month, their rent and insurance totals $45,000. The variable costs per teddy bear are $0.25.

What are the total variable costs if they produce 100,000 golf balls?

• $15,000

• $45,000

• $70,000

• $25,000

Gilheany Ltd produces protein shakes. Each month, their rent and insurance totals $100,000. Their total variable costs last month totaled $200,000

What were the average variable costs if they produced 400,000 units last month?

• $0.50

• $0.05

• $0.15

• $5.00

Choudhury Ltd produces cardigans. Each month, their rent, loan repayments and insurance totals $500,000. They produced 125,000 cardigans last month.

What were the average fixed costs for Choudhury Ltd last month?

• $3.75

• $5.00

• $4.00

• $6.00

Smailes Ltd produces test tubes. Each month, their rent, loan repayments and insurance totals $300,000. They produced 1.5million test tubes last month.

What were the average fixed costs for Smailes Ltd last month?

• $0.02

• $0.20

• $2.00

• $20.00

McGhee Ltd produce packets of breath mints Each month, their rent, loan repayments and insurance totals $600,000. The average variable costs per packet is $0.05.

Last month, McGhee produced 100,000 units. Calculate the total variable costs:

• $500

• $5,000

• $15,000

• $50,000

English Ltd sells art brushes. Which one of the following is an example of a fixed cost?

• Insurance

• Raw materials

• Packaging

• Piece rate salaries

King Ltd make books. Each month, their rent, loan repayments and insurance totals $20,000. They produced 500 books last month. The total variable costs totaled $1,500.

What were the average variable costs for King Ltd?

• $1.00

• $2.00

• $3.00

• $4.00

Keyworth Ltd produces calculators. Each month, their rent, loan repayments and insurance totals $20,000. They produced 8,000 calculators last month. The total variable costs totaled $6,500.

What were the average fixed costs for King Ltd?

• $1.50

• $2.00

• $2.50

• $3.00

What is the formula to calculate a firms TOTAL COSTS?

• Fixed costs X Total Variable costs

• Fixed costs - Total Variable costs

• Fixed costs + Total Variable costs

• Fixed costs / Total Variable costs