Suppose Cyd Knows the Average Total Cost of Producing 9

question 223

Multiple Choice

Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20.What is the marginal cost of the 10th scone?

• A)$7
• B)$5.20
• C)$0.20
• D)$5

---

Definitions:

Efficiency Variance

The difference between the actual amount of resources used in production and the amount that should have been used, reflecting efficiency in resource usage.

Direct Materials

Raw materials that are directly used in the production of a product, easily traceable to the product itself.

Rate Variance

The difference between the actual rate paid for goods or services and the expected (or standard) rate, most often related to labor or materials.

Direct Labor-Hours

Sum of working hours of staff directly participating in the production process of an item.