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Reply to these prompts using the company for which you currently work, a business with which you’re familiar,or the dream business you want to start: What are some key fixed and variable costs for...

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Reply to these prompts using the company for which you currently work, a business with which you’re familiar,or the dream business you want to start:

  • What are some key fixed and variable costs for this business?Remember,fixed costs do not change when output changes.That is,fixed costs remain even if the company is producing nothing.Variable costs increase as output increases.
Answered Same Day Jul 24, 2021

Solution

Komalavalli answered on Jul 25 2021
138 Votes
The company which I wanted to explain is Restaurant business.
Fixed cost: Fixed costs are the cost that remains constant regardless of business output. Fixed cost of restaurant are Rent, Health and Zoning permit, Depreciation on kitchen equipment, furniture etc and Loan payments.
Rent: We have to pay rent for restaurant even during period of keeping restaurant closed.
Health and Zoning permit: In order to establish a restaurant we need to get health and zoning permit. For this permit we need to pay particular amount regardless of...
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