Exploring Fixed and Variable Costs in Business

What are the two main categories of business costs discussed?

• Variable and Fixed Costs

• Static and Dynamic Costs

• Fixed and Dynamic Costs

• Variable and Static Costs

Why do variable costs increase with higher production?

• Fixed costs increase

• More raw materials are needed

• Because of higher utility usage

• Due to increased labor

What is the variable cost per t-shirt in Tom's Tops?

• 5 pounds

• 10 pounds

• 15 pounds

• 20 pounds

How many t-shirts does Tom plan to produce each month?

• 100 t-shirts

• 200 t-shirts

• 1000 t-shirts

• 500 t-shirts

What remains constant regardless of the number of t-shirts produced?

• Production time

• Variable costs

• Raw materials cost

• Fixed costs

What is the monthly rent for Tom's storage unit?

• 300 pounds

• 200 pounds

• 400 pounds

• 500 pounds

How is total cost calculated in a business?

• Variable costs / Fixed costs

• Fixed costs + Variable costs

• Variable costs * Fixed costs

• Fixed costs - Variable costs

What would be Tom's revenue if he sold each t-shirt for 10 pounds?

• 4000 pounds

• 5000 pounds

• 3000 pounds

• 2000 pounds

What is the potential loss if Tom sets the price at 5 pounds per t-shirt?

• 2000 pounds

• 1900 pounds

• 1000 pounds

• 1500 pounds

Why is it crucial for Tom to know his total costs?

• To choose suppliers

• To set a profitable price

• To plan employee schedules

• To decide on marketing strategies