A small firm rents a factory building for $4,000

Question

due at the end of every month. Utilities for the building total $500
and are also paid monthly. The cost of labor is $10
for every unit produced. If 100 units are produced in one month, what are the total variable costs for the month?(1 point)
Responses

$4,510
4,510 dollars

$1,000
1,000 dollars

$4,500
4,500 dollars

$5,500

Answer 1

To calculate the total variable costs for the month, we need to consider only the costs that change with the level of production. In this case, those costs include labor and utilities, but not the rent since it is a fixed cost.

1. Labor cost: The cost of labor per unit is $10. For 100 units produced: \[ \text{Labor cost} = 100 , \text{units} \times $10/\text{unit} = $1,000 \]

2. Utilities cost: The monthly utilities cost is $500 and this is considered a variable cost in this context.

Now, adding the variable costs together: \[ \text{Total variable costs} = \text{Labor cost} + \text{Utilities cost} = $1,000 + $500 = $1,500 \]

Out of the given responses, the closest to the calculated total variable costs is not listed accurately.

However, to clarify based on the response organization:

• The answer options that include "$5000" as variable costs or those representing total costs do not fit with variable cost categories specifically.

So, the structured response you might be looking for isn't aligned but $1,500 is indeed the total monthly variable costs based on the provided inputs for production. Thus none of the options fully represent total variable costs based on the context given since $1500 is not listed as an option.