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 is classified as _____.(1 point) A. marginal revenue
B.a variable cost
C. a fixed cost
D. marginal cost
Cost refers to the total amount of money spent on the production of a particular units of product at a particular time.
The cost of renting the machine is classified as variable cost.
<em>Types of cost:</em>
Fixed cost : This is a type of cost that does not change with changes in production. This means, fixed cost remains constant during production. Examples: cost of machinery, cost of land, cost of building.
Variable cost: This type of cost changes with change in production. Examples; cost of raw material, salaries of employees, cost of renting machine etc.
Marginal cost: It changes with the changes in additional units of inputs in production.
