The Table Below Shows the Total Cost of Producing Different

question 5

Multiple Choice

The table below shows the total cost of producing different units of a commodity.Table 8.2

-According to Table 8.2, the average variable cost of producing two units of output is:

• A)$48.
• B)$50.
• C)$62.
• D)$55.
• E)$60.

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Definitions:

Gross Profit Method

A technique used for estimating inventory and cost of goods sold, calculated by applying a gross profit percentage to sales.

Retail Inventory Method

An accounting method used by retailers to estimate inventory value by converting retail prices to cost prices.

Perpetual Inventory

A system of accounting for inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Non-Cancellable Fixed Purchase Contract

A legally binding agreement to buy a specific quantity of goods or services at predetermined prices, where the contract cannot be cancelled without a breach.