-If Total Costs Are $50,000 When 1000 Units Are Produced

question 44

Multiple Choice

-If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that

• A) average variable costs are $100.
• B) average total costs are $100.
• C) average fixed costs are $100.
• D) marginal costs are $100.

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Definitions:

Equity Method

An accounting technique used to record investments in associate companies, where the investment is initially recognized at cost and adjusted thereafter for the investor's share of the investee's profit or loss.

Investment

An investment is an asset or item acquired with the goal of generating income or appreciation in value over time.

Fair Value Method

An accounting strategy that assesses and assigns a market-based valuation to assets and liabilities, reflecting their current exchange price.

Accounting

The organized method of documenting, examining, condensing, and presenting the economic activities of a company or person.