If Homer Operates a Small Bakery and Sells Donuts For$4/dozen

question 4

Multiple Choice

If Homer operates a small bakery and sells donuts for$4/dozen, he should:

• A)sell an additional dozen donuts as long as the marginal cost of producing an additional dozen donuts is less than $4.(True
• Answer )Correct
• B)sell an additional dozen donuts as long as the total cost of producing an additional dozen donuts is less than
• $4)
• C)only sell more donuts if his total revenue is greater than his total cost.
• D)sell an additional dozen donuts so long as the fixed cost of production is greater than $4.

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Definitions:

Safeguarding Assets

Refers to the actions and policies put in place by an organization to protect its assets from theft, damage, or misuse.

Voucher System

A method of accounting in which documents are used to authorize and record transactions.

Cash Receipts

Money received by a business from its operations, including cash sales and collections on credit accounts.

Bank Reconciliation

The process of comparing and adjusting the balance of an account as reported by a bank to the balance in a company’s financial records.