Factors to Be Considered in Reassessing the Estimate of Recoverable

question 40

Multiple Choice

Factors to be considered in reassessing the estimate of recoverable reserves each year include:

• A) the past production rate compared to total estimated reserves.
• B) the possibility that technological developments or discoveries may make the product obsolete or uneconomical at some future time.
• C) changes in technology, market or economic conditions affecting either sales prices or production costs, with a consequent impact on cut-off grades.
• D) the possibility that technological developments or discoveries may make the product obsolete or uneconomical at some future time and changes in technology, market or economic conditions affecting either sales prices or production costs, with a consequent impact on cut-off grades.

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Definitions:

Fixed Costs

Costs that do not change with the level of output produced, such as rent, salaries, and loan payments.

Marginal Cost

The monetary outlay for producing an additional unit of a good or service.

Fixed Costs

Expenses that do not change in the short term regardless of the level of production or sales, such as rent and salaries.

Average Total Cost Curve

A graph that shows the per unit cost of production at various levels of output.