Use the Table Below to Answer the Following Questions

question 20

Multiple Choice

Use the table below to answer the following questions.
Table 11.2.3
-Refer to Table 11.2.3,which gives the total cost schedule for Brenda's Balloon Shop,a perfectly competitive firm.The average fixed cost of producing the 4th balloon is

• A)$4.30.
• B)$4.80.
• C)$4.70.
• D)$4.50.
• E)$1.00.

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Definitions:

Ending Inventory

Merchandise value ready for sale at the close of an accounting cycle.

Consistency Principle

An accounting standard that mandates entities to apply the same accounting methods and practices from period to period.

Expense Recognition Principle

This principle dictates that expenses should be recognized in the accounting period when they are incurred, not necessarily when they are paid, matching expenses to the revenues they help generate.

Physical Flow Assumption

An accounting method that tracks the physical movement of goods in inventory, often used to calculate cost of goods sold or ending inventory.