Which One of the Following Statements Is Correct

question 67

Multiple Choice

Which one of the following statements is correct?

• A) Average total cost equals total ?xed cost divided by total output.
• B) Average ?xed cost equals total cost divided by total output.
• C) Average variable cost equals the cost incurred in producing an additional unit of output.
• D) Average total cost equals total costs divided by total output.

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Definitions:

Operating Assets

Assets that a business uses for its day-to-day operational activities to generate revenue, excluding investment and non-operational assets.

Return on Investment

A financial ratio that calculates the profitability of an investment by dividing the net profit by the initial cost of the investment.

Controllable Margin

The portion of profit or income that a manager can directly influence by controlling costs or increasing sales.

Invested Capital

Funds invested in a company by the shareholders and lenders, used for the purchase of assets and operation of the company, aiming for business growth and profitability.