Transactions Involving the Purchase and Sale of Long-Term Assets, Investing

question 69

Multiple Choice

Transactions involving the purchase and sale of long-term assets, investing in equity securities, lending money, and collecting the principal on related loans are called

• A) investing activities.
• B) operating activities.
• C) financing activities.
• D) buying and selling activities.

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Definitions:

Average Variable Cost

The total variable costs (e.g., materials, labor) divided by the quantity of output produced, representing the variable cost per unit.

Marginal Cost

The hike in cost associated with the creation of an extra unit of a good or service.

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit of output.

Average Variable Cost

The cost of labor, material, or overhead that changes in direct proportion to the level of production or output.