The Total Product Is 10 Units

question 16

Multiple Choice

The total product is 10 units. The average total cost is $30 and the average fixed cost is $10. What is the amount of the TOTAL variable cost?

• A) $300
• B) $10
• C) $200
• D) $20
• E) It is impossible to determine with the information given.

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Definitions:

Equipment Depreciation

The reduction in value of equipment over time due to wear and tear or obsolescence.

Supervisory Expense

Costs associated with managing and overseeing employees or departments, not directly tied to production or service delivery.

Overhead Costs

Expenses related to the day-to-day operations of a business that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Equipment Depreciation

The process of spreading out the cost of physical assets over their useful lives for accounting and tax purposes.