(Figure: Cost Schedule) in the Figure, What Is the Average

question 3

Multiple Choice

(Figure: Cost Schedule) In the figure, what is the average total cost to produce 4 units?
$\begin{array}{|c|c|c|c|}\hline \text { Quantity } & \text { Fixed Cost } & \begin{array}{c}\text { Variable } \\\text { Cost }\end{array} & \begin{array}{c}\text { Marginal } \\\text { Cost }\end{array} \\\hline 0 & \$ 11 & \$ 0 & - \\\hline 1 & 11 & 3 & \$ 3 \\\hline 2 & 11 & 8 & 5 \\\hline 3 & 11 & 14 & 6 \\\hline 4 & 11 & 23 & 9 \\\hline 5 & 11 & 36 & 13 \\\hline\end{array}$

• A) $8.50
• B) $9
• C) $34
• D) $2.75

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Definitions:

Containers Refurbished

Refers to the process of repairing, cleaning, and restoring containers to a like-new condition for reuse.

Activity Variance

The deviation between the budgeted amount of activity and the actual amount of activity during a specific period.

Budgeting

A financial planning process for projecting revenues, expenses, and savings goals for a specific period of time.

Net Operating Income

The total profit of a business after subtracting operating expenses but before deducting taxes and interest.