Business Costs

Base3d on Activity 2-2 on LMS, answer the following questions:

Define fixed costs.

List the fixed costs mentioned.

Define Variable costs

List the variable costs mentioned.

Write the formula for total costs.

Total costs = .....................+............................

What is the average cost?

Write the formula for the average cost.

Average cost=..............................................

Sultan opened an Italian restaurant in Al Ain. He sells 1000 pizzas every week.

He has a list of costs that must be paid.

• - Bank fees  AED 1000

• - Rent of restaurant  AED 30,000

• - Mozzarella cheese and tomato sauce  AED 500

• - Salary of the chef and 2 waiters  AED 40,000

• - Insurance  AED 1500

• - Advertising  AED 2000

• - Petrol for delivery car  AED 1500

• - Internet bill  AED300

• - Kitchen supply  AED 350

Calculate the fixed costs for Sultan's restaurant.

Calculate the variable costs.

Calculate the total costs.