How Will Unit (Average) Cost of Manufacturing (Materials, Labor and Overhead)

question 53

Multiple Choice

How will unit (average) cost of manufacturing (materials, labor and overhead) usually change if the production level rises?

• A)It will remain constant.
• B)It will increase in direct proportion to the production increase.
• C)It will increase, but inversely with the production increase.
• D)It will decrease inversely and in direct proportion to the production increases.
• E)It will decrease, but not in direct proportion to the production increase.

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Definitions:

Accountants

Professionals who perform accounting functions such as audits or financial statement analysis according to prescribed methods.

Wages

Payments made to employees for their labor, typically calculated by hour, day, or piece.

Foregone Opportunities

The benefits or income missed out on when choosing one alternative over another.

Tuition

The fee charged for instruction or education provided by schools, colleges, and universities.