Answer the Question on the Basis of the Following Cost

question 149

Multiple Choice

Answer the question on the basis of the following cost data. $\begin{array} { | c | c | } \hline \text { Output } & \text { Total Cost } \\\hline \mathbf { 0 } & \mathbf { \$2 4 } \\\hline 1 & 33 \\\hline 2 & 41 \\\hline 3 & 48 \\\hline 4 & 54 \\\hline 5 & 61 \\\hline 6 & 69 \\\hline\end{array}$ The total variable cost of producing 5 units is

• A) $61.
• B) $48.
• C) $37.
• D) $24.

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Definitions:

Financial Advantage

The benefit gained in financial terms from a particular action or situation, often measured in terms of profit, savings, or net worth.

Practical Capacity

The maximum output that a company can produce in a real-life scenario, taking into account planned maintenance, breaks, and other non-operational activities.

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.