Refer to Scenario 9.10. In the short run, if the cafe shuts down, its losses will equal its costs of .

A) variable; $2,600
B) total; $6,600
C) fixed; $4,000
D) fixed; $2,000

Question

Refer to Scenario 9.10. In the short run, if the cafe shuts down, its losses will equal its ________ costs of ________.A)  variable; $2,600B)  total; $6,600C)  fixed; $4,000D)  fixed; $2,000

Greatness Untold · Accepted Answer

Final Answer : C, Explanation :  In the short run, if the cafe shuts down, its losses will equal its fixed costs because variable costs (like wages and materials) would not be incurred if no meals are being served. The fixed costs include the 10% return on the $1,040,000 investment ($104,000 annually or $2,000 weekly) plus the other fixed costs of $2,000 weekly, totaling $4,000 weekly.

Refer to Scenario 9.10. In the short run, if the cafe shuts down, its losses will equal its costs of .

A) variable; $2,600
B) total; $6,600
C) fixed; $4,000
D) fixed; $2,000

Definitions

Learning Objectives

Learning Objectives

Related questions