Use the Following to Answer Questions

question 43

Multiple Choice

Use the following to answer questions :
Figure 7-1
-Given the curves shown in Figure 7-1, the average fixed cost of 3 units of output is:

• A)$3.00.
• B)$6.00.
• C)$8.33.
• D)$25.00.
• E)none of the above.

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Definitions:

Budgeted Cash Disbursements

An estimate of all cash payments that a business plans to make over a specific period, including operating expenses and capital expenditures.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming to more accurately reflect the costs incurred.

Manufacturing Costs

Expenses related to the production of goods, including direct materials, direct labor, and manufacturing overhead.

Product Costs

All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. Also see Inventoriable costs.