Consider the following figures which refer to a firm’s production department during one week:
Wage bill ₦6,000, Rent, Rates, Depreciation ₦200, raw materials ₦800, Power ₦300.
Total variable costs incurred during the week are?
A. ₦7,300
B. ₦7,100
C. ₦1,300
D. ₦1,100
Correct Answer: Option B
B. ₦7,100
Explanation
Total variable costs also known as variable cost. TVC is the cost that varies or changes with the level of output.
TVC = 6000 + 800 + 300
TVC = ₦7100
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