When a Firm Produces 1000 Widgets with Total Cost of $2000

question 84

Multiple Choice

When a firm produces 1000 widgets with total cost of $2000 and fixed cost of $1000,what is the average variable cost?

• A)$2
• B)$1
• C)$0.50
• D)$0.20

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Definitions:

Normal Starting Balance

Normal Starting Balance refers to the initial amount of money in an account at the beginning of a financial period.

Debit Postings

Entries made on the left side of an account, increasing the balance of assets and expenses or decreasing liabilities and equity.

Credit Postings

Entries made on the credit side of an account ledger, indicating an increase in liability, revenue, or equity accounts, or a decrease in asset or expense accounts.

Liability Account

An accounting record used to track obligations the company owes to others, such as loans, leases, or accounts payable.