As Table Manufacturing Company Produces More Tables,the Average Total Cost

question 29

Multiple Choice

As table manufacturing company produces more tables,the average total cost of each table produced increases.This is because:

• A)Total fixed costs are decreasing as more tables are produced
• B)There is economies of scale
• C)There is diseconomies of scale
• D)Total variable cost is decreasing as more clubs are produced.

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Definitions:

Bonds Payable

A long-term liability account on a company’s balance sheet that represents the amount owed to bondholders by the issuer, to be repaid at a future date.

Unamortized Premium

Unamortized Premium is the portion of the bond premium that has not yet been expensed and is allocated over the remaining life of the bond as an adjustment to interest expense.

Consolidated Gain or Loss

The combined profit or loss of a parent company and its subsidiaries, reported in the consolidated financial statements.