The Efficient Scale of a Firm Is Achieved When

question 143

Multiple Choice

The efficient scale of a firm is achieved when:

• A)average variable cost is minimised
• B)fixed costs are spread over the most units
• C)marginal costs are at a minimum
• D)average total costs are minimised

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Definitions:

Work In Process-Assembly

Items in a manufacturing process that have been partially completed but are not yet finished goods.

First-In, First-Out

An inventory valuation method where goods first added to inventory are the first ones to be sold.

Equivalent Units

A conceptual unit used in cost accounting to represent the amount of work done on partially completed goods, allowing for the calculation of unit costs.

Finishing Department

A section in a manufacturing process where products are completed, processed further, or refined after initial production stages.