The variable cost of the horse ranch is $345,000.
<h3>What is meant by total cost?</h3>
The total cost includes the fixed cost as well as the variable cost.
The total cost remains fixed irrespective of the change in the total output. As a result, total cost covers the cost of all inputs necessary to produce a specific level of output.
The variable costs that vary according on how much of a good or service a company produces are known as variable costs.
The cost of the horse ranch is $550,000 per year.
The fixed costs are $250,000 per year.
Thus the variable cost = total cost - fixed cost
= $550,000 - $250,000
= $345,000
Therefore, the variable cost of the horse ranch is $345,000 per year.
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