TABLE 8-1 -Refer to Table 8-1. What Is the AVC of Producing

question 34

Multiple Choice

TABLE 8-1

-Refer to Table 8-1. What is the AVC of producing three units of output?

• A) $15
• B) $31.66
• C) $45
• D) $50

---

Definitions:

Ordinary Repair

Expenditures to maintain the operating efficiency and expected productive life of an asset, treated as an expense.

Capitalization

The total value of all a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Repairs and Maintenance

The expenses a company incurs to keep its assets in working condition, not extending the life of the asset but rather restoring it or maintaining current condition.