As Quantity Increases,which of the Following Must Be True If

question 56

Multiple Choice

As quantity increases,which of the following must be true if average total costs are rising?

• A) Marginal cost must be greater than average total cost.
• B) Marginal cost must be less than average total cost.
• C) Average fixed cost must be increasing.
• D) Average fixed cost must be less than average variable cost.

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Definitions:

Manufacturing Statement

A financial statement that summarizes the costs of producing goods during a specific period.

Schedule of Cost

A detailed report that outlines the various costs involved in producing a product, including direct materials, direct labor, and manufacturing overhead.

Goods Manufactured

The total volume of products that a company has produced within a specific period.

Managerial Accounting

It encompasses the activities of detecting, evaluating, investigating, clarifying, and distributing economic information to the leadership team for the purpose of realizing the goals of the entity.