to improve productivity, a local bakery rents a machine that mixes, partitions, and then bakes dough for a variety of pastries. the machine costs the business $2,500 per month to rent and operate, regardless of output. the cost of renting the machine isa classified as variable cost.
cost refers to the whole amount of cash spent on the manufacturing of a particular unit of product at a particular time.
The value of renting the system is assessed as a variable cost.
fixed fee: that is a sort of price that doesn't alternate with modifications in production. this indicates constant cost remains regular for the duration of manufacturing. Examples: cost of equipment, price of land, value of construction.
variable cost: This form of fee modifications with changes in manufacturing. Examples; the value of raw fabric, salaries of employees, price of renting machines,s and many others.
Marginal fee: It changes with the modifications in additional gadgets of inputs in manufacturing.
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