If at a Given Volume Total Costs and Fixed Costs

question 6

Multiple Choice

If at a given volume total costs and fixed costs are known, the variable costs per unit may be computed as follows:

• A) (Total costs - Fixed costs)/Unit volume
• B) (Total costs/Unit volume) - Fixed costs
• C) (Total costs × Unit volume) - (Fixed costs/Unit volume)
• D) Total costs - (Fixed costs/Unit volume)

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Definitions:

Arithmetic Average Return

The simple mean of a series of returns generated over a period of time.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and amount of cash flows into the investment.

Arithmetic Average

The simple mean calculated by adding a set of values and then dividing by the number of values.

Geometric Average

The nth root of the product of n numbers, used to calculate average rates of return over time for investments that undergo compounding.