A manufacturing company leases a building for 100000 per yea

A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $20,000 per year. Each unit of the product produced costs $15 in labor and $10 in materials. The product can be sold for $40. Choose the statement that is correct

Solution

correct statements

Price of the product is $50        ans . wrong .          price is $40

The fixed cost is $120,000 per year.    ans.   correct building + machinery cost

The TOTAL variable cost is $15 per unit.     ans. wrong      it is $25 (labor+ material)

Cost of material is a fixed cost                   ans. wrong       cost of material is per unit cost that\'s why variable cost