Discounts Which Reduce the Price for Customers Who Buy Items

question 74

Multiple Choice

Discounts which reduce the price for customers who buy items for resale or to produce other goods are

• A) purchase discounts.
• B) sale discounts.
• C) trade discounts.
• D) cash discounts.

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Definitions:

Average Variable Cost

The total variable costs of production divided by the quantity of output, showing the average cost of producing each unit excluding fixed costs.

Average Total Cost

The total cost of producing a certain quantity of a good divided by that quantity, representing the cost per unit of output.

Total Fixed Costs

The total of all expenses that do not change with the amount of production or output.

Total Variable Costs

The sum of all costs that change with the level of output, such as materials and labor directly involved in production.