Explain why this statement is true or false: "If the labor cost per table is $20 and the material cost per table is $30, the short run average cost per table is $50."
Explain why this statement is true or false: "If the labor cost per table is $20 and the material cost per table is $30, the short run average cost per table is $50."
Introduction
Labor cost, material cost and average cost are all used to measure the cost of products or services. Labor cost refers to the amount of money a company pays its employees for their work, including wages, benefits and other expenses. Material cost is the amount of money a company spends on raw materials, such as wood, metal or plastic, to create their products. Average cost is the total cost of a particular product or service divided by the number of units produced or the number of services provided. Average cost can help a company determine the price of their products or services and make sure they are charging enough for their products in order to turn a profit.
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