Suppose Larry's Lariats Produces Lassos in a Factory, Using Nine

question 26

Multiple Choice

Suppose Larry's Lariats produces lassos in a factory, using nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length and seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. Which of the following expenses would be considered a variable cost for this company?

• A)The cost of the factory
• B)Employee wages
• C)The rope-cutting machine
• D)All of these expenses are variable costs.

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Definitions:

Government

The system or group of people governing an organized community, often a state, and the institutions through which policies are set and affairs of state are conducted.

Price Control

Price Control is a government policy or legal stipulation that sets limits on the prices that can be charged for goods and services in a market.

Government

The body or system through which a community, state, or nation is governed, providing order, security, and services to its population.

Market Price

The current price at which an asset or service can be bought or sold in a given market.