Refer to the Graph Shown

question 69

Multiple Choice

Refer to the graph shown. Total cost of producing Q* is represented by:

• A)area 0Q*AF.
• B)area 0Q*BE.
• C)area 0Q*CD.
• D)cannot be determined.

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Definitions:

Purchase of Raw Materials

The acquisition of the basic materials required for the production of goods or delivery of services.

Work in Process Inventory

The account that tracks the costs associated with partially completed goods that are still in the process of being manufactured.

Unadjusted Cost of Goods Sold

Unadjusted Cost of Goods Sold (COGS) is the initial calculation of all costs directly associated with the production of goods before any adjustments for inventory changes or other factors.

Journal Entry

A record in the accounting journal that represents a business transaction and its effect on the accounts.