Question

Which of the following is​ true? Question content area bottom Part 1 A. Direct materials are considered to be fixed costs. B. Manufacturing overhead is always a variable cost. C. A marginal cost is the cost of making one more unit. D. The average cost can be used to predict total costs at other volumes.

Answer 1

Marginal cost usually entails the cost of an additional unit.

The option that is actually true is:

C. A marginal cost is the cost of making one more unit.

Marginal Cost

Marginal cost is known to be the cost that is incurred for producing one more unit of a good. It usually includes all the costs that are incurred as there is a change in the level of production.

When a firm wants to expand their production and then decides to build a new firm, the cost of building that firm is marginal cost.

In order to calculate marginal cost, one can use the change in quantity to divide the change in production costs.

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