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The cost of making one more unit is called: marginal cost.unit cost. C) variabl

 The cost of making one more unit is called:

A) marginal cost.

B) unit cost.

C) variable cost.

D) none of the above

7) Farm Supply plans to make 10,000 tractors at its plant. Fixed costs are $1,000,000 and variable costs are $500 per tractor. What is the average cost per tractor?

A) $600

B) $500

C) $100

D) None of the above

8) A(n) ________ cost is one whose total amount changes in direct proportion to a change in volume.

A) fixed

B) irrelevant

C) mixed

D) variable

9) Which of the following is an example of a fixed cost for a manufacturer?

A) Salary of plant manager

B) Sales commissions

C) Direct materials

D) Delivery costs

10) Which of the following describes the way in which variable costs per unit behave?

A) They will decrease as production increases.

B) They will increase as production decreases.

C) They will remain the same throughout production levels.

D) They will decrease as production decreases.

11) Which of the following describes the way in which total variable costs behave?

A) They remain the same throughout production levels.

B) They will decrease as production decreases.

C) They will decrease as production increases.

D) They will increase as production decreases.

12) Which of the following describes the way in which total fixed costs behave?

A) They will remain the same throughout production levels.

B) They will decrease as production decreases.

C) They will decrease as production increases.

D) They will increase as production decreases.

13) Which of the following describes the way fixed costs per unit behave?

A) They will remain the same throughout production levels.

B) They will decrease as production decreases.

C) They will increase as production increases.

D) They will increase as production decreases.

14) Variable costs:

A) are fixed in total as production levels change.

B) are fixed per unit and vary in total as productions levels change.

C) decrease per unit as production volume increases.

D) vary per unit of output as production levels change.

15) A company has monthly fixed costs of $112,000. The variable costs are $5.00 per unit. If the sales price of a unit is $20.00 and we sell 8,000 units, the company's average fixed costs per unit will be:

A) $19.00 per unit.

B) $5.00 per unit.

C) $14.00 per unit.

D) $15.00 per unit.

Dec 07 2019 Read more Less More

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