-Refer to the Data Above

question 21

Multiple Choice

$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\\text { of Output }\end{array} & \text { Fixed Costs } & \begin{array} { c } \text { Variable } \\\text { Costs }\end{array} & \text { Total Costs } & \text { Marginal Costs } \\\hline 0 & \text { R10 } & \text { R0 } & & \\\hline 1 & 10 & 5 & & \\\hline 2 & 10 & 11 & & \\\hline 3 & 10 & 18 & & \\\hline 4 & 10 & 26 & & \\\hline 5 & 10 & 36 & & \\\hline\end{array}$
-Refer to the data above. The average fixed cost of producing four units is:

• A) R2.50
• B) R5
• C) R9
• D) R26
• E) R40

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Definitions:

Operating Profit

The income generated by a company's main business activities, not including interest and tax deductions.

Markdown

A reduction from the original or previous selling price of goods or services.

Breakeven

The juncture where total expenses match total income, leading to neither a net profit nor a loss.

Mark-up

A financial addition to the product's cost to cater to company overheads and profit gain.