Refer to the Information Provided in Figure 8

question 177

Multiple Choice

Refer to the information provided in Figure 8.1 below to answer the question(s) that follow. Figure 8.1
-Refer to Figure 8.1 above. If Cyndyʹs Floral Arrangements produces 100 silk flower arrangements, the average fixed costs are

• A) $0.10.
• B) $10.
• C) $1,000.
• D) There is not enough information in the graph to answer this question.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders but instead reinvested in the business or used to pay off debt.

Fixed Assets

Fixed Assets are long-term tangible property that a firm owns and uses in its operations to generate income, such as machinery, buildings, and equipment.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, decay, or obsolescence.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.