The _____________________ Curve Will Always Lie Below the Curve for Average

question 30

Multiple Choice

The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation.

• A) marginal cost; total costs
• B) marginal cost; fixed costs
• C) average variable cost; fixed costs
• D) average variable cost; total costs

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Definitions:

Work in Process

Refers to the cost of the unfinished goods in the manufacturing process including labor, material, and overhead.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost multiplied by the actual quantity purchased or used.

Raw Materials

Basic materials used in the production or manufacturing process, before being transformed into finished goods.

Work in Process

Goods that are in the midst of being produced, representing inventory that is not yet fully completed.