-In the Above Figure, the Relationship Between Costs Indicates That

question 76

Multiple Choice

-In the above figure, the relationship between costs indicates that the distance between curves

• A) A and B is equal to the variable cost.
• B) B and C is equal to the fixed cost.
• C) B and C is equal to the average total cost.
• D) A and B is equal to the fixed cost.

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Definitions:

Equivalent Unit

A concept in cost accounting used to compute the cost of partially completed goods, translating them into a number of fully completed units.

Assembly Department

A section of a manufacturing company where components are assembled into final products.

Costs Per Unit

The total expense involved in manufacturing or acquiring a product divided by the number of units.

Step-Down Method

An allocation method used in cost accounting to assign overhead costs to products or departments, incorporating inter-departmental services.