Use the Following to Answer Question

question 47

Multiple Choice

Use the following to answer question:
-(Table: Variable Costs for Lots) Use Table: Variable Costs for Lots.During the winter,Alexa runs a snow-clearing service in a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of clearing each of the lots from 1 through 10 is $20.Also assume that she can only plow the quantities of the lots given in the table (and not numbers in between) .Her only fixed cost is $1,000 for a snowplow.Her variable costs include fuel,her time,and hot coffee.If the price to clear a lot is $60,what is Alexa's profit per unit at the optimal output?

• A)$60
• B)$42
• C)$35
• D)$18

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Definitions:

Internal Transactions

Transactions that occur within a company, affecting its internal accounts without involving an external party.

External Transactions

Financial transactions that involve parties outside of the company, impacting the company's financial statements.

Accrual Basis Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is received or paid.

Adjusting Entry

An accounting record made to update the financial statements to reflect income earned or expenses incurred but not yet recorded.