A Company Purchased Inventory as Follows

question 171

Multiple Choice

A company purchased inventory as follows:
200 units at $10
300 units at $12
The average unit cost for inventory is

• A) $10.00.
• B) $11.00.
• C) $11.20.
• D) $12.00.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Average Variable Cost

The total variable cost divided by the quantity of output produced.

Output

The amount of goods or services produced by a company, sector, or economy.

Fixed Cost

Costs that do not vary with the level of output or production, such as rent, salaries, and insurance premiums.