The Change in Total Cost Resulting from a One-Unit Increase

question 32

Multiple Choice

The change in total cost resulting from a one-unit increase in production is called:

• A)total fixed cost
• B)average variable cost.
• C)marginal cost.
• D)external cost.
• E)social cost.

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Definitions:

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading its cost over its useful life.

Intra-entity Gross Profit

Gross profit generated from transactions within the same corporate entity, which may require elimination during consolidation to prevent overstating earnings.

Consolidation Process

This refers to the systematic approach of merging and integrating the financial data of multiple entities within a corporation to produce a unified set of financial statements.

Intra-entity Gross Profit

Profits resulting from transactions within or between entities under common control, not recognized in consolidated financial statements until realized externally.