If Fixed Costs Are $200,000 and Variable Costs Are $30

question 218

Multiple Choice

If fixed costs are $200,000 and variable costs are $30 per unit over the relevant range of output, when 10,000 units are produced, the average total cost will be

• A) $20.
• B) $30.
• C) $50.
• D) $70.

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Definitions:

Higher Standard

A level of quality or attainment that is above the ordinary or expected.

Nonmerchants

Individuals or entities that do not engage in buying, selling, or dealing in goods as their regular business activity.

Unconscionable Contract

An agreement that is so unfairly one-sided that it is deemed unenforceable under the law.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize and simplify the law.