Straker Industries Estimated Its Short-Run Costs Using a U-Shaped Average

question 15

Multiple Choice

Straker Industries estimated its short-run costs using a U-shaped average variable cost function of the form and obtained the following results.Total fixed cost TFC) at Straker Industries is $1,000. At Straker Industries,average variable cost AVC) reaches its minimum value at $________.

• A)$24.50
• B)$33.60
• C)$72.80
• D)$121.80

---

Definitions:

Inventory Shrinkage

The loss of products between point of manufacture or purchase from supplier and point of sale, often due to theft, damage, or errors.

Physical Count

The process of manually counting the actual inventory on hand to verify stock levels and account for discrepancies.

Inventory Records

Documents that track the quantity, value, and movement of products or materials a company holds in stock.

FOB Shipping Point

A shipping term indicating that the buyer assumes all risk and pays for shipping costs from the point of departure; ownership of goods transfers to the buyer when the carrier picks up the items.