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:

Direct Method

A way of presenting the cash flow statement where major classes of gross cash receipts and payments are disclosed, offering a more straightforward view of cash flow from operating activities.

Cafeteria Department Costs

Expenses associated with operating a company's cafeteria, including food, labor, and overhead costs.

Sequential Method

A procedure in cost accounting for allocating service department costs to producing departments in a specific order.

Direct Method

Definition: A cash flow statement preparation approach that presents major classes of gross cash receipts and payments.