Which of the Following Must Be True If Average Variable

question 94

Multiple Choice

Which of the following must be true if average variable costs are decreasing?

• A) Average fixed cost exceeds average total cost.
• B) Marginal cost exceeds average variable cost.
• C) Marginal cost is less than average variable cost.
• D) Marginal cost is less than average total cost.

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Definitions:

Production Department

A segment within a business that is responsible for the manufacturing or production of goods.

Mixing Department

A production area or unit within a manufacturing facility where ingredients or components are combined to produce a final or intermediate product.

Standard Costs

Predetermined costs to manufacture a single unit or a number of units of a product during a specific period under expected or normal conditions.

Materials Quantity Variances

The difference between the actual quantity of materials used in production and the expected quantity, measured in cost.