The Average Total Cost of Producing Laptop Computers in a Factory

question 107

Multiple Choice

The average total cost of producing laptop computers in a factory is $500 at the current output level of 100 units per week. If fixed costs equal $10 000, which of the following statements regarding cost is accurate?

• A) Average variable cost equals $400.
• B) Average fixed cost equals $10 000.
• C) Variable cost equals $50 000 per week.
• D) Total cost equals $60 000 per week.

---

Definitions:

ERP

Enterprise Resource Planning is software utilized by companies for the daily management of business operations including accounting, procurement, project management, and manufacturing.

TPS

Transaction Processing System, a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise.

CRM

Customer Relationship Management, a technology for managing a company's interactions and relationships with current and potential customers.

MRP II

Manufacturing Resource Planning (MRP II) is an integrated method for effective planning of all resources of a manufacturing company, including production scheduling and inventory management.