Which of the Following Costs Can Be Positive When Output

question 127

Multiple Choice

Which of the following costs can be positive when output is zero?

• A) average variable cost
• B) total variable cost
• C) marginal cost
• D) total fixed cost
• E) None of the above because when output is zero there are no costs.

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Definitions:

Residual Income

The excess of divisional income from operations over a “minimum” acceptable income from operations.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the profit of an investment by its cost.

Income From Operations

Income from operations refers to the profit realized from a firm's core business activities, excluding deductions for interest and taxes.

Office Salaries Expense

The costs associated with paying salaries to administrative and office employees.