What Amount of the Following Items Should Be Accounted for in an Internal

question 74

Multiple Choice

What amount of the following items should be accounted for in an internal service fund?

• A)$2,100,000.
• B)$1,760,000.
• C)$1,640,000.
• D)$350,000.

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Definitions:

Marginal Cost

The augmentation in complete expenditure resulting from the manufacture of one more unit of a good or service.

Economies Of Scale

The cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale.

Law Of Diminishing Returns

An economic principle stating that adding more of one factor of production, while holding others constant, will at a certain point yield lower incremental per-unit returns.

Economies Of Scale

The financial benefits that businesses achieve because of their size of operation, generally seeing a reduction in cost per unit of output as the scale expands.