Average Variable Cost Equals

question 155

Multiple Choice

Average variable cost equals

• A) TC/Q.
• B) TVC/Q.
• C) TFC/Q.
• D) change in total cost/change in output.

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Definitions:

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, providing a more useful tool for performance evaluation.

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as raw materials and direct labor.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant part of its composition.

Actual Cost

The actual amount spent on goods, services, and labor to produce an item or to run a company.