-In the Above Table, What Is the Average Variable Cost

question 19

Multiple Choice

-In the above table, what is the average variable cost to produce 3 units of output?

• A) $30
• B) $60
• C) $10
• D) $20

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, and the business makes neither a profit nor a loss.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even Point

The point at which total costs and total revenue are equal, meaning that there is no net loss or gain, and the business is not making a profit.

Direct Materials Cost

The cost of raw materials directly used in the production of products or services.