Refer to the Table Below

question 48

Multiple Choice

Refer to the table below. The average cost of 5 units of activity is:

• A) $4
• B) $6
• C) $8
• D) $10

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Definitions:

Costs

Expenses incurred in the process of producing or acquiring goods and services.

Volume

The quantity or amount of something, often used in context with sales volume or production volume.

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials, packaging, or labor directly associated with product manufacturing.

Activity Levels

The amount of effort or capacity utilized in the operations of a business, which can influence cost and operational efficiency.