Suppose a pizza parlor has the following production costs 4$ in labor per pizza, 3$ in ingredients per pizza,.40$ in electricity per pizza, 2000$ in restaurant rent per month, and $450 in insurance per month. Assume the pizza parlor produces 1,000 pizzas in a month. What is the total variable cost to produce the 1,000 pizzas?

the variable cost comes out to be $740

Explanation:

given,

labor per pizza = 4$

ingredients per pizza = 3$

electricity cost per pizza =.40$

restaurant rent per month = 2000$

insurance per month = $450

pizza produced per month = 1,000

variable cost per pizza = labor cost + ingredients cost + electricity cost

variable cost per pizza = 4$ + 3$ +.40$

= 7.4$

variable cost per month = 1000 * 7.4$

= 740 $

hence the variable cost comes out to be $740.