For a Manufacturer of Kitchens, Which of the Following Would

question 3

Multiple Choice

For a manufacturer of kitchens, which of the following would you expect to be a direct cost?

• A) Hourly labour cost of employees installing kitchens
• B) Material for kitchen benchtops
• C) Hourly labour cost of employees installing kitchens AND material for kitchen benchtops
• D) Rent of factory premises

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Definitions:

Long-Run Average Total Cost Curve

A graphical representation showing the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output.

Minimum

The lowest allowable or possible amount, level, or point.

Marginal Cost

The amount needed to generate one more unit of a good or service.

Average Total Cost

The overall expense of manufacturing, when dispersed across the number of products made, encompassing both constant and fluctuating expenses.