At the point where average variable cost reaches its minimum value

a) marginal cost also reaches its minimum value.
b) average variable cost equals marginal cost.
c) marginal cost equals zero.
d) average variable cost equals average total cost.

B) average variable cost equals marginal cost.

Explanation: Average variable cost, AVC, is the total amount of variable cost per unit of output. This allows a company to see what the total cost and sales amount needs to be completed to zero out any variable cost out of pocket and where they are able to start earning a profit on their items.

The journal entries are made as follows;

Explanation:

Jan 2     Patent   Dr. $355,950

             Cash  Cr.$355,950

July 1  Franchise Rights   Dr.$597,600

          Cash                       Cr.$597,600

Sept 1  Research Development Expense Dr.$177,000

           Cash                                                Cr.$177,000

Dec 31. Amortization on patent (355,950/7)  Dr.$50,850

            Accumulated Amortization                 Cr.$50,850

Dec 31. Amortization on franchise rights (597,600/9)*6/12 Dr.$33,200

            Accumulated Amortization                                          Cr.$33,200

The research and development expenses will be charged to income statement as they were incurred in testing phase of intangible.Therefore it is assumed that they all have been incurred in research phase of intangible.