Figure 3-2. -Refer to Figure 3-2. the Cost Behavior of the Materials

question 100

Multiple Choice

Figure 3-2.
-Refer to Figure 3-2. The cost behavior of the materials cost is

• A) fixed
• B) variable
• C) committed
• D) discretionary

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Definitions:

Accounting Profit

Accounting profit is the net income a company reports on its financial statements, calculated as total revenues minus explicit costs and depreciation.

Marginal Product

The extra production obtained by employing an additional unit of a variable resource, while keeping the rest of the inputs unchanged.

Fixed Cost

Expenses that do not change in the short term regardless of the level of production or output.

Average Fixed Cost

The fixed costs of production (costs that don't change with the level of output) divided by the quantity of output produced.