Problem 1:
Q1. The cost of the four ovens is a fixed cost. The addition of more employees does not change the cost of the ovens. The cost of the ovens is $1000. The cost of the workers is a variable cost because it is determined by the number of workers that are available in a given period. Each worker is paid $500 per week, but the pizza shop employs different numbers of workers. There is an increasing rate of return from the range of 0-5 employees that are hired by the pizza shop. There is a diminishing rate of return Continue reading...
