Question

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following except:
A) ingredients used in preparing food.
B) hours worked by cooks.
C) rent on the restaurant building.
D) energy costs.
E) hours worked by the servers.

Answer 1

For David, the variable costs associated with staying open longer hours will include all of the following except rent on the restaurant building.

Option C

Explanation:

Variable costs are prices that change when a company modifies the quantity of the product or service. The amount of the marginal costs for all generated units is variable costs. You can also take the normal costs into account. The two elements of the total cost represent fixed costs and variable costs.

Rent for rooms that your business has, including office spaces, can include overheads. It can also include your weekly salary. Machinery depreciation is nearly always a fixed cost.

The bulk of work costs, fee on purchases, delivery charges, shipping costs, compensation and wages are other sources of rising costs. Employee performance incentives are also known as variable expenses.  In many cases–not always –contingent costs can be reduced without major problems rather than fixed costs.