The Tullahoma School District's Print Shop Internal Service Fund Received

question 18

Multiple Choice

The Tullahoma School District's Print Shop Internal Service Fund received $25,000 from a state grant to help subsidize its printing operations. The Internal Service Fund will report this contribution as a

• A) Transfer in.
• B) Capital contribution.
• C) Nonoperating revenue.
• D) Direct equity adjustment to restricted net position.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant regardless of the business activity.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output, representing the variable cost per unit of output.

MC = MR

An economic principle stating that to maximize profits, firms should produce up to the point where marginal cost equals marginal revenue.

MC = MR

The principle that profit maximization occurs when a firm's marginal cost (MC) equals its marginal revenue (MR).