If Melissa Owns a Software Company That Incurs No Fixed

question 104

Multiple Choice

If Melissa owns a software company that incurs no fixed costs, then

• A) her total cost equals her total variable cost.
• B) her total cost equals zero.
• C) her total variable cost is less than her total cost.
• D) she will earn an economic profit.
• E) her marginal cost must equal zero.

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Definitions:

Process Cost System

An accounting method used to track production costs for products that are not distinguishable from one another, often used in manufacturing.

Department Report

A document or record detailing the performance, progress, or financial status of a specific department within an organization.

Work In Process Inventory

Refers to the value of materials and labor invested in products that are partially completed but not yet finished goods.

Raw Materials

Primary materials used in the production of goods, often processed in manufacturing to create finished products.