The Value of Marginal Product (VMP) of an Input Such

question 214

Multiple Choice

The value of marginal product (VMP) of an input such as labor is the

• A) additional output produced by the last unit of an input.
• B) total revenue divided by the units of the input employed.
• C) extra revenue gained by selling one more unit of output.
• D) extra revenue gained by employing one more unit of the input.

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Definitions:

Direct Materials

Materials directly linked to the production of a certain product and incorporated into its cost.

Predetermined Overhead

An estimated rate used to allocate overhead costs to products or services based on expected activities and costs.

Direct Materials

Materials that can be directly linked to the production process and form a fundamental component of the final product.

Direct Labor-Hours

The cumulative hours that employees actively participating in manufacturing processes have worked.