Which Statement Is True

question 211

Multiple Choice

Which statement is true?

• A)AFC declines with output.
• B)ATC declines with output.
• C)AFC - AVC = ATC.
• D)Output divided by fixed cost = AFC.

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Definitions:

Process Operations

A method of production that involves continuous processing of materials to produce goods or provide services.

Work In Process Inventory

The account on the balance sheet representing the cost of the incomplete goods that are still in the process of production.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units they represent.

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed goods, expressed in terms of fully completed units.