If Jane Can Produce 3 Pairs of Shoes Hourly,while Bob

question 92

Multiple Choice

If Jane can produce 3 pairs of shoes hourly,while Bob can produce 2,then one can infer that the __________ advantage belongs to __________.

• A) absolute;Bob
• B) comparative;Jane
• C) comparative;Bob
• D) comparative;both of them
• E) absolute;Jane

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Definitions:

Variable Manufacturing Overhead

Indirect, fluctuating costs involved in the production process, such as utilities and maintenance, that are not directly tied to specific units produced.

Fixed Manufacturing Overhead

Costs related to manufacturing that do not vary with the level of production, such as factory rent, salaries of permanent staff, and depreciation of factory equipment.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Expenses

These are costs that change in proportion to the activity of a business.