If Marginal Cost Exceeds Average Variable Cost,then _____

question 116

Multiple Choice

If marginal cost exceeds average variable cost,then _____

• A)average variable cost is negative.
• B)average variable cost is increasing.
• C)marginal cost is greater than average total cost.
• D)average variable cost is decreasing.
• E)average fixed cost is increasing.

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Definitions:

Overhead Cost Application

The process of distributing overhead costs to specific cost objects such as products, services, or departments based on a chosen allocation base.

Traditional Costing Systems

Costing methods that allocate manufacturing overhead costs to products based on a single measure of activity, such as direct labor hours.

Activity Information

Data related to specific actions or operations within a company, used to analyze performance or make decisions.

Comprehensive

Including or dealing with all or nearly all elements or aspects of something.