Average Variable Cost Is the Ratio Of

question 210

Multiple Choice

Average variable cost is the ratio of:

• A)total cost to marginal cost.
• B)total cost to the amount of variable input.
• C)variable cost to the quantity of output.
• D)marginal cost to the quantity of output.

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Definitions:

Unit-level Costs

Costs that are incurred for every unit produced, directly proportional to the production volume.

Product Cost

The total cost incurred to create a product, encompassing raw materials, labor, and overhead expenses.

Direct Labor Costs

Expenses associated with the labor directly involved in the production of goods or services.

Manufacturing Overhead

The indirect costs associated with manufacturing a product, including utilities, depreciation on machinery, and maintenance costs, not directly tied to production volume.