Average Cost

question 24

Multiple Choice

Average cost

• A)is always larger than marginal cost.
• B)declines for some range of output, hits a minimum, and then increases.
• C)is always smaller than marginal cost.
• D)is total cost/price of the product.

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Definitions:

Current Year

Refers to the ongoing calendar or fiscal year, often used in accounting and reporting to denote the present period.

LIFO

"Last In, First Out," an inventory valuation method where the goods purchased last are the first ones to be used or sold.

Gross Profit

The financial metric representing the difference between sales revenue and the cost of goods sold (COGS), before deducting overhead, payroll, taxes, and interest payments.

Ending Inventory

Merchandise value set for sale at an accounting period's end.