If Marginal Cost of an Additional Unit of Output Is

question 152

True/False

If marginal cost of an additional unit of output is greater than average cost, then average cost will rise.

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Definitions:

Manufacturing Overhead

All indirect manufacturing costs, including indirect labor, materials, and utilities necessary for production, but not directly associated with specific units.

Planning Budget

A budget created at the beginning of the budgeting period, reflecting the expected costs and revenues based on forecasted levels of activity.

Manufacturing Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as utilities and rent for the manufacturing facility.

Administrative Expenses

Costs related to the general management and administration of a business, such as salaries of executive officers and costs of the legal department.