small bakery expenses\nyou own a small bakery. your monthly expenses include the following:\nrent…

small bakery expenses\nyou own a small bakery. your monthly expenses include the following:\nrent: $1,000\nliability insurance: $400\nproperty insurance: $200\ningredients: $1,500\nwages: $5,000\nutilities: $300\nhealth insurance: $700\nworkers compensation insurance: $300\nadvertising: $500\noffice supplies: $200\nadditionally, you must pay 7.65% social security and medicare taxes on the monthly wages.\nwhat is the total amount of variable expenses for the bakery?\n$8,550\n$7,000.45\n$6,700\n$6,840.70

small bakery expenses\nyou own a small bakery. your monthly expenses include the following:\nrent: $1,000\nliability insurance: $400\nproperty insurance: $200\ningredients: $1,500\nwages: $5,000\nutilities: $300\nhealth insurance: $700\nworkers compensation insurance: $300\nadvertising: $500\noffice supplies: $200\nadditionally, you must pay 7.65% social security and medicare taxes on the monthly wages.\nwhat is the total amount of variable expenses for the bakery?\n$8,550\n$7,000.45\n$6,700\n$6,840.70

Answer

Explanation:

Step1: Identify variable expenses

Variable expenses are those that change with the level of production or sales. Here, ingredients ($1,500), wages ($5,000), and advertising ($800) are variable. Also, we need to calculate 7.65% of wages for Social - Security and Medicare taxes.

Step2: Calculate tax amount

The tax on wages is $5000\times0.0765 = 382.5$.

Step3: Sum up variable expenses

The sum of variable expenses is $1500 + 5000+800 + 382.5=7682.5$. But there seems to be an error in the provided options as the correct sum based on our calculation is not among them. Assuming we made a wrong interpretation and we don't consider the tax part and just sum ingredients, wages and advertising, we have $1500+5000 + 800=7300$ which is also not in the options. If we assume the problem has some data - entry issues and we consider only ingredients, wages and advertising without the tax calculation, the closest option to $1500 + 5000+800 = 7300$ is $6840.70$ as it is the closest value among the given options.

Answer:

$6,840.70$