44. A bakery spends $140 per day on fixed costs and $90 per day for labor for each employee. One employee can bake 60 cakes in a day. What is the total cost to produce 300 cakes per day?
Answer: C
The total cost to produce 300 cakes per day is $590.
To find the total cost to produce 300 cakes per day, we first calculate the labor cost needed for the production. Since one employee can bake 60 cakes in a day, to bake 300 cakes, at least 5 employees are required. The total cost includes both the fixed costs and the variable labor costs.
A) 320
This option is incorrect because it underestimates the total cost significantly. It does not account for the necessary labor costs associated with producing 300 cakes, which alone would exceed this amount when considering the fixed costs.
B) 290
This option is also incorrect as it fails to incorporate the total fixed costs and the labor costs adequately. The labor costs alone, calculated with the required number of employees, surpasses this figure, leading to an incomplete calculation.
C) 590
This is the correct option. The total cost includes $140 in fixed costs plus $450 in labor costs (5 employees at $90 each), resulting in a total of $590, which accurately represents the entire cost of producing 300 cakes.
D) 1,150
This option is incorrect as it overestimates the total cost. It may arise from a misunderstanding of the labor costs or the number of employees required, but the calculations show that the total does not reach this amount.
Conclusion
The correct answer, $590, accurately reflects the total costs of producing 300 cakes when accounting for both fixed and variable expenses. Other options either underestimate or overestimate the necessary expenses, demonstrating a clear misunderstanding of the cost structure involved in the bakery's operations.