Find the Average Cost for Producing 400 Books If the Average

question 3

Multiple Choice

Find the Average cost for producing 400 books if the average function is $\mathrm { A } ( x ) = \frac { C ( x ) } { x }$ where $C ( x ) = 6.5 x + 3000$

• A)$14.00
• B)$66.50
• C)$21.50
• D)$6.50

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Definitions:

Predetermined Overhead Allocation Rate

This rate is calculated before the accounting period begins and is used to allocate overhead costs to products or services based on a specific activity base.

Direct Labor Cost

The wages and benefits paid to workers who are directly involved in the production of goods.

Equivalent Units

A term used in cost accounting to represent a conversion of partially completed goods into a number of fully completed units.

Direct Materials

Raw materials that are directly traceable to the production of a specific good or service and directly incorporated into the final product.