The Total Variable Cost Curve ________ Because ________ as Output

question 14

Multiple Choice

The total variable cost curve ________ because ________ as output increases.

• A) slopes upward; variable cost increases
• B) slopes upward; marginal cost increases
• C) slopes downward; variable cost increases
• D) slopes downward; marginal cost increases
• E) is horizontal; fixed cost does not change

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Definitions:

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate representation of product costs.

Direct Materials

Raw materials that are directly consumed in the manufacturing process of a product and are easily identifiable in the final product.

Unit Cost

The cost incurred to produce, store, and sell one unit of a product, calculated by dividing total costs by the number of units.

Cost Driver

A factor that causes the cost of an activity or process to change.