Asked by
Jitesh Chaudhari
on Dec 05, 2024Verified
Darren runs a barbershop with average fixed costs of $60 per day and a total output of 50 haircuts per day.Darren shuts down every year during the last week of July and the first week of August (meaning it is open 50 weeks a year) .What is his annual fixed cost if he is open six days per week?
A) $18,000
B) $3,000
C) $60
D) The answer cannot be determined with the information available.
Average Fixed Costs
The fixed costs of production divided by the quantity of output produced, decreasing as production increases.
Annual Fixed Cost
The total of all business expenses that remain constant regardless of any change in production levels or sales volume over a year.
Total Output
The aggregate quantity of goods or services produced by an economy, sector, or production process over a specific period.
- Calculate annual costs based on operational periods and output levels.
Verified Answer
JZ
Learning Objectives
- Calculate annual costs based on operational periods and output levels.