Mark Is Trying to Determine His Firm's Average Cost Per

question 117

Multiple Choice

Mark is trying to determine his firm's average cost per unit of production. He finds that the cost for all labor and materials is $80,000 and fixed overhead expenses are $40,000. If the company produces 20,000 items in the time period, the average cost is

• A) $12.
• B) $2.
• C) $6.
• D) $4.
• E) $10.

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Definitions:

Shipment Contracts

Agreements where the seller is obligated to ship goods but does not need to deliver them to a specific destination, transferring risk to the buyer upon shipment.

Sale of Goods

A commercial transaction where the ownership of physical items is transferred from a seller to a buyer in exchange for payment.

Destroyed

To have been completely ruined, damaged beyond repair, or made non-functional.

Profession

A vocation founded upon specialized educational training, the purpose of which is to supply disinterested objective counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain.