Managers Often Consult Financial Statements for Specific Types of Information

question 19

Essay

Managers often consult financial statements for specific types of information.Indicate whether each of the following items would appear on the income statement,statement of owner's equity,or the balance sheet.Note that an item may appear on more than one statement.The first item is completed as an example.

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Definitions:

Average Costs

The total cost of production divided by the quantity produced, often used to evaluate production efficiency.

Fixed Costs

Costs that remain constant regardless of the level of production or sales activities, such as rent, salaries, and insurance premiums.

Marginal Costs

Marginal costs represent the change in total production cost that arises when the quantity produced is incremented by one unit, essentially the cost of producing one additional unit of a good.

Marginal Productivity

Marginal productivity is the additional output that is produced by using one more unit of a certain input, assuming that all other inputs remain constant.