Which of the Following Items Would Least Likely Be Classified

question 6

Multiple Choice

Which of the following items would least likely be classified as part of direct materials for an automobile manufacturer?

• A)Steel
• B)Paint
• C)Tires
• D)Screws

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average cost of production per unit when fixed costs are excluded.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Shut Down

A short-term decision by a firm to cease operations when variable costs exceed revenues, typically in a perfect competition scenario.

Short Run

A time period in economics during which at least one factor of production is fixed, limiting the ability of the economy or firm to fully adjust.