Economies of scale imply that within some range one can increase the size of operation and: a. average total cost will increase. b. average variable cost will decrease. c. average total cost will decrease. d. fixed cost will decrease. e. total cost will decrease.

d. $4,000.00

Explanation:

This question presents an incomplete record scenario. With the Purchases amount missing.

Find the Purchases amount by preparing a Trading Account and determine the missing Purchases Amount.

Carr's inventory purchases during the period was $2,000

Trading Account

Sales                                                                    $8,000

Less Cost of Sales

beginning inventory                     $1,000

Add Purchases                             $4,000

Less Ending inventory               ($2,000)        ($3,000)

Gross profit                                                         $5,000