Cost Schedule -In the Above Table, the Average Variable Cost of Producing

question 28

Multiple Choice

Cost schedule

-In the above table, the average variable cost of producing 14 units of output is

• A) $0.175.
• B) $5.71.
• C) $7.86.
• D) $10.00.

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Definitions:

Variable Costing

An accounting approach that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in product costs, excluding fixed manufacturing overhead.

Unit Product Cost

The calculated cost of producing a single unit of product, which includes both fixed and variable costs.

Total Period Cost

The entire sum of expenses incurred by a business during a specific period, including both fixed and variable costs.

Absorption Costing

An accounting method that includes all manufacturing costs (direct labor, materials, and overhead) in the cost of a product.