Question

In one year, the Hotel by the Shore incurred $100,000 in fixed costs. Because the hotel booked 10,000 room nights, its total variable cost is $100,000 (10,000 room nights × $10 per room). Thus, its total cost is Multiple Choice $10,000. $200,000. $20,000 $100,000. $120,000.

Answer 1

Answer:

$200,000

Explanation:

Total cost = Fixed cost + variable cost

$200,000 = $100,000 + $100,000

Fixed cost is cost that do not vary with production. E.g. rent

If no production activity takes places, fixed cost would still be incurred.

Variable cost is cost that varies with production e.g. wages

If no production activity takes place, there would be no variable cost.

I hope my answer helps you.