An Invoice for $40,000 Dated March 15 with Terms 3/10

question 209

Multiple Choice

An invoice for $40,000 dated March 15 with terms 3/10, 2/20, n/30, ROG was received in the mail on March 18. The shipment of goods was received on March 28. What payment April 8 would reduce the outstanding balance to $20,000?

• A) $19,600
• B) $20,000
• C) $20,400
• D) $20,600
• E) $19,400

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Definitions:

Average Total Cost

The total cost divided by the number of goods produced; it includes all variable and fixed costs.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it varies with production levels.

Average Fixed Cost

The constant expenses associated with production, which remain unaffected by the amount of goods produced, divided by the number of items made.

Average Variable Cost

The total variable cost of production divided by the quantity of output produced.