Question

Barton's Taco Tico has four taco makers and ten other employees who take orders from customers and perform other tasks. The four taco makers and the other employees are paid an hourly wage. How would you classify (1) the wages paid to the taco makers and other employees and (2) materials (e.g., cheeses, salsa, tomatoes, lettuce, taco shells, etc.) used to make the tacos?A Fixed Cost Fixed
B Fixed Cost Variable
C Variable Cost Fixed
D Variable Cost VariableA) Choice C B) Choice D C) Choice A D) Choice B

Answer 1

Answer:

The correct answer is letter "B": Choice D.

Explanation:

Fixed costs are business expenses that do not change when production levels increase or decrease. These are one of two types of business expenses and the other is variable costs. Variable costs change with increases or decreases in production volume. Then:

1) The wages paid to the taco makers and other employees - Variable Costs

2) Materials (e.g., cheeses, salsa, tomatoes, lettuce, taco shells, etc.) used to make the tacos - Variable Costs