Average Variable Cost Is

question 101

Multiple Choice

Average Variable Cost is

• A)the addition to cost associated with one additional unit of output.
• B)the per unit cost of production.
• C)the per unit variable cost of production.
• D)the per unit fixed cost of production.

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Definitions:

Flexible Budget

A budget that adapts or changes according to fluctuations in activity levels or volume.

Fixed Costs

Costs that do not vary with the level of production or sales over a certain range, such as rent, salaries, and insurance.

Activity Level

A measure of the volume of production or operations, which can impact costs and profitability within a business.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate costs more accurately.