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2 answers

I can't answer this one because I don't understand the question...however it looks very much like a "homework" question to me!

2007-09-27 10:42:11 · answer #1 · answered by Anonymous · 0 0

Because if you produce zero goods your variable costs are zero ..

For this to be strictly correct, any 'minimum' component of a variable cost has to be extracted and costed as a separate item .. for example, in Manufacturing labour is often regarded as a variable cost.. however there is a 'minimum' .. even if your factory is producing nothing you still need to employ eg. Security staff just to keep the factory viable... same applies to Electrical power (need to keep some minimum heating / lighting even if none of the Machinery is running)

2007-09-27 19:38:45 · answer #2 · answered by Steve B 7 · 0 0

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