Joe and Ed Go to a Diner That Sells Hamburgers

question 107

Multiple Choice

Joe and Ed go to a diner that sells hamburgers for $5 and hot dogs for $3.They agree to split the lunch bill evenly.Ed chooses a hot dog.The marginal cost to Joe if he orders a hamburger, instead of a hot dog, is

• A)$1.
• B)$2.
• C)$2.50.
• D)$3.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly involved in creating the good.

Accounts Payable Decrease

A reduction in the amount a company owes to its suppliers or vendors, indicating payments have been made.

Direct Method

A approach to cash flow statement preparation where actual cash receipts and payments are reported, instead of adjusting net income.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, and salaries.