ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Should operate only during the day to save on electricity.
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Should be open until midnight.
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Should be open 9-5 because of variable cost.
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Should be open 24 hours a day.
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Detailed explanation-1: -Variable costs can be controlled or altered in the short run by changing production levels. Fixed costs are beyond the business manager’s current control; they are incurred in the short run and must be paid regardless of output level.
Detailed explanation-2: -Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees. In some accounting statements, the Variable costs of production are called the “Cost of Goods Sold.”
Detailed explanation-3: -Lower Direct Labor Needs Through Automation. Manual labor is often one of the biggest variables involved in a business’s cost structure. Increase Profitability by Streamlining Workflows. Reduce Variable Packaging Costs by Seeking Aftermarket Consumables.
Detailed explanation-4: -Use the Average of Your Expenses. Treat Variable Expenses Like Fixed Expenses. Inflate Estimated Costs for Your Variable Expenses. Do Your Best to Plan in Advance.