The Relationship Between Average and Marginal Variables Can Be Stated

question 219

Multiple Choice

The relationship between average and marginal variables can be stated as follows: if the marginal is greater than the average,

• A) the average is increasing.
• B) the average is decreasing.
• C) the marginal is increasing.
• D) the marginal is decreasing.
• E) the total is decreasing.

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Definitions:

Unfavorable Variance

A financial term describing a situation where actual costs exceed budgeted or planned costs.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure performance and efficiency.

Volume Variance

The difference between the planned volume of production or sales and the actual volume, which can affect costs and revenue.

Overhead

Indirect costs associated with running a business that can't be directly attributed to a specific product or service, such as utilities and rent.