When Marginal Cost Is Less Than Average Total Cost

question 94

Multiple Choice

When marginal cost is less than average total cost,

• A)marginal cost must be falling.
• B)average variable cost must be falling.
• C)average total cost is falling.
• D)average total cost is rising.

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Definitions:

Spending Variances

The differences between the budgeted or planned amounts of spending and the actual amounts spent.

Customers Served

The total number of customers who receive service or products from a business within a given time period.

Revenue

The total amount of income generated from the sale of goods or services before any expenses are subtracted.

Spending Variances

Differences between the actual spending and the budgeted or planned spending in a given period, often analyzed in cost and managerial accounting.