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This is a constant expense that will not change. Whether we produce one hamburger or 1000 hamburgers, the cost of building rent will stay the same. The variable cost is the cost of raw materials used for making hamburgers. Variable costs will increase as production increases, but the cost per unit will remain the same as long as the cost of the raw materials does not change.
If we currently produce 1000 hamburgers at an annual cost of $650.00, the cost per unit is 65 cents per unit. The cost for building rent/1000 units is $9.00 per unit. This means that it cost $9.65 per unit to make each hamburger...
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