Which of the following is most likely to be a variable cost for a firm?
A. the monthly rent on office space that it leased for a year
B. the payroll taxes that are paid on employee wages
C. the franchiser's fee that a restaurant must pay to the national restaurant chain
D. the interest payments made on loans
Answer: B
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Your friend Harry has quit his $20,000-a-year job to start a business that rents fishing boats. He asks you to lend him $50,000 and agrees to pay you a 10% return on your $50,000 if he earns a profit
During the first year Harry's total revenue is $120,000 and his total cost for equipment and supplies are $100,000 . Harry tells you that he cannot pay you any interest this year because he did not earn a profit. Is your friend Harry trying to cheat you?
If the required reserve ratio was 25 percent, a bank that received currency deposits of $16,000:
a. could now issue $64,000 of new loans. b. could now issue $16,000 of new loans. c. could now issue $12,000 of new loans. d. could now issue $4,000 of new loans.