The Following Table Shows the Cost of Producing Different Units

question 54

Multiple Choice

The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1

-According to Table 8.1, the average variable cost of producing five ball point pens is:

• A)$3.5.
• B)$2.
• C)$4.
• D)$2.5
• E)$4.5

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Definitions:

Operating Assets

Assets used in the day-to-day operations of a business to generate revenue, excluding investment and idle assets.

Controllable Margin

A measure of profitability that represents the amount of income over which managers have control, usually after direct costs have been deducted from revenues.

ROI

Return on Investment, a measure used to evaluate the financial performance of an investment by dividing the benefit (or return) of the investment by its cost.

Investment Center

A business unit within an organization that is responsible not only for generating profits but also for managing its own investments and capital.