Question

Emma owns a flower shop in Tampa. She pays $3,091 per month to lease her building, $2,208 in wages, $1,887 for flowers and other supplies and she produces 662 flower arrangements per month. Emma’s average variable cost of production equals:__________.

Answer 1

Answer:

$6.18

Explanation:

Data provided in the question:

Lease payment = $3,091 per month

Wages = $2,208

Amount for Flowers and other supplies = $1,887

Number of flower arrangements produced per month = 662

Now,

The Variable cost are Wages and Amount for Flowers and other supplies

therefore,

Total variable cost = $2,208 + $1,887

= $4,095

Hence,

Emma’s average variable cost of production

= [ Total variable cost ] ÷ [ Number of flower arrangements produced ]

= $4,095 ÷ 662

= $6.18