Marginal Cost Is Defined as the

question 28

Multiple Choice

Marginal cost is defined as the

• A) cost of an additional unit of a variable factor of production.
• B) change in fixed cost resulting from an additional unit of output.
• C) cost per unit when the firm is operating at capacity.
• D) difference between average total cost and average variable cost.
• E) change in total cost resulting from an additional unit of output.

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Definitions:

Sales Tax

Sales tax is a tax imposed by governments on sales of goods and services, collected by the retailer at the point of sale.

Installation

Installation involves setting up or putting into place a piece of equipment or system, often requiring technical skills and specific procedures.

Equipment Account

An account in financial statements that represents the cost of equipment purchased by a business, excluding any accumulated depreciation.

Land Improvements

An asset account that records improvements made to land; such improvements have a limited life and are subject to depreciation (examples are a driveway or fences).