Total Costs Increase from $1,500 to $1,800 When a Firm

question 18

Multiple Choice

Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units..Which of the following are true?​

• A)​AC rise by $1.50
• B)AC rise by $1.00
• C)AC fall by $1.50
• D)​AC fall by $1.00

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Definitions:

Budgeted Manufacturing

The estimated amounts and costs associated with the production process, as planned for a specific period.

Variable Manufacturing

Costs in manufacturing that vary with the level of production output, such as raw materials and direct labor costs.

Fixed Costs

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like rent, wages, and insurance.

Budgeted Costs

Estimated expenses for a future period, which are prepared for planning and control purposes.