Consider table 31 What is the total dollar amount of fixed c

Consider table 3.1. What is the total dollar amount of fixed costs at the production level of 600 units? ion Rent Tools $100 100 $3D0 $410 5650 $1,200 $1,520 $1,905 $2,300 S100$300 $150 $200 $250 $1,350 $1,750 $2.200 $2,670 $3,205 $700 $350 $800$3 $3,750 700 Select one: O a. 600 Ob. 1905 c. 3205 d. None of the above

Solution

Fixed costs mean that costs is same at all levels of outputs. In this case, rent is the only factor which is fixed at $300 value for all output levels. Other inputs costs like wages, suppliers and tools have different costs at different output levels. So, fixed cost is $300.

(d) is correct.