If Marginal Cost Equals Average Total Cost

question 60

Multiple Choice

If marginal cost equals average total cost:

• A) average total cost is minimized.
• B) marginal cost is minimized.
• C) average variable cost is minimized.
• D) average variable cost is falling.

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Definitions:

Equivalent Units

Equivalent units are a concept in cost accounting used to represent the amount of work done on incomplete units, expressed in terms of fully completed units.

Work in Process Inventory

Goods that are in the production process but are not yet completed.

Direct Materials

Materials in their unprocessed or natural state that can be directly linked and assigned to the end product during the production phase.

Work in Process

Inventory that is in the production process and has not yet been completed or turned into final goods.