If Fixed Costs Do Not Change, Then Marginal Cost

question 204

Multiple Choice

If fixed costs do not change, then marginal cost

• A)also remains constant.
• B)equals the change in variable cost divided by the change in output.
• C)equals the change in average variable cost divided by the change in output.
• D)equals the change in average fixed cost divided by the change in output.

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Definitions:

Deferred Tax Account

An account on a company’s balance sheet that is a provision for income taxes that have been accrued but are not yet due.

Unrealized Profits

Profits that have been earned but not yet realized through a transaction, such as an increase in value of an investment that has not been sold yet.

Inventory

the totality of goods and materials held by a company for the purpose of resale, manufacturing, or repair.

Consolidation

The act of merging several items into a single or unified whole, commonly used in contexts of financial accounting to unify financial documents.