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Sagot :
The variable cost of the horse ranch is $345,000.
What is meant by total cost?
The total cost includes the fixed cost as well as the variable cost.
The total cost remains fixed irrespective of the change in the total output. As a result, total cost covers the cost of all inputs necessary to produce a specific level of output.
The variable costs that vary according on how much of a good or service a company produces are known as variable costs.
The cost of the horse ranch is $550,000 per year.
The fixed costs are $250,000 per year.
Thus the variable cost = total cost - fixed cost
= $550,000 - $250,000
= $345,000
Therefore, the variable cost of the horse ranch is $345,000 per year.
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