Economic capacity of a plant represents its:
A. maximum physical output level
B. average output level over a period
C. break-even output and sales level
D. output level that equates the average and the marginal costs
Answer: Option D
Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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