Rose incurs \$7,200 per month in fixed costs operating her floral shop. She pays her employees \$9 per hour and had three assistants working 120 hours this month. Her other variable costs were \$800 this month. What are Rose's total variable costs and total costs this month?

• A. Total variable costs are \$800; total costs are \$8,000
• B. Total variable costs are \$800; total costs are \$11,240
• C. Total variable costs are \$3,240; total costs are \$11,240
• D. Total variable costs are \$4,040; total costs are \$11,240

Answer: (D)

Verified step by step guidance

1. Identify the fixed costs: Rose's fixed costs are given as \$7,200 per month.
2. Calculate the labor costs: Rose has three assistants working 120 hours each. The wage rate is \$9 per hour. Therefore, the total labor cost is calculated as 3 assistants * 120 hours/assistant * \$9/hour.
3. Identify other variable costs: These are given as \$800 for the month.
4. Calculate total variable costs: Add the labor costs to the other variable costs. This gives the total variable costs for the month.
5. Calculate total costs: Add the total variable costs to the fixed costs to find the total costs for the month.