If Average Fixed Cost and Average Variable Cost Are Summed

question 13

Multiple Choice

If average fixed cost and average variable cost are summed together,the result is:

• A) total revenue.
• B) total profit.
• C) total cost.
• D) average total cost.

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Definitions:

Net Credit Sales

The total revenue from sales made on credit after deducting any returns or allowances, representing the true credit sales figure.

Percentage-of-Sales Basis

A method used in budgeting and planning where certain costs or expenses are based on a fixed percentage of sales.

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account representing the estimated amount of receivables that may not be collected, reducing net accounts receivable to a more realistic value.