Solution-Determining the production costs

Determining the production costs

Assignment Help Macroeconomics

Reference no: EM131373023

"Production Costs" Please respond to one of the following:

You are the owner of a fast-food restaurant. Given a new item that you recently advertised, you experience additional demand for your business that you do not want to ignore. Identify your fixed and variable costs at your fast-food restaurant, and explain the changes to each of these costs given the increased demand.
Consider the table below:

*Economic Versus Accounting Costs*
*Item:*	*Cost*
Total annual labor cost (the business owner does not draw a salary)	$160,000.00
Total annual cost of materials used in production	$250,000.00
Annual expenditure on rent, utilities, taxes, insurance, and misc. expenses	$90,000.00
The business owners' previous annual salary when he worked for someone else	$85,000.00
The business owner's annual interest income before sinking all of his funds into this business	$15,000.00

What is the Accounting Cost of operating this business? What is the Economic Cost? Why do they differ?

Reference no: EM131373023

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Determining the production costs

Reference no: EM131373023

Reference no: EM131373023

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