Average Fixed Cost Can Be Calculated Using Any of the Formulas

question 245

Multiple Choice

Average fixed cost can be calculated using any of the formulas below except

• A)TFC/Q.
• B)(TC - VC)/Q.
• C)Δ(TC - VC)/ΔQ.
• D)(TC/Q)- AVC.

---

Definitions:

Work in Process Inventory

Work in process inventory consists of goods partially completed, not yet ready for sale, representing the cost of raw materials, labor, and overhead involved in production.

Direct Materials

Raw materials that can be directly attributed to the production of goods.

Direct Labor

The wages and related expenses for employees who are directly involved in the production of goods or services.

Overhead Cost

Rephrased: Expenditures related to the business's general operations, not directly linked to any specific product or service.