If 25 Units of a Good Are Produced at a Fixed

question 59

Multiple Choice

If 25 units of a good are produced at a fixed cost of $50 and a total cost of $550, then the average total cost of producing the good is:

• A)$15.
• B)$20.
• C)$25.
• D)$30.
• E)none of the above.

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Definitions:

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Liability Account

A type of financial account which represents a company's legal debts or obligations that arise during the course of business operations.

Expense Account

An account used in accounting to track expenditures related to the operation of a business, including costs for goods, services, and operational activities.

Adjusting Journal Entries

Entries in accounting made during the close of a financial period, aiming to accurately allocate profits and expenditures to their respective periods of occurrence.