- Which of the Following Statements Is True for the Two

question 150

Multiple Choice

- Which of the following statements is true for the two countries illustrated in Figure 35.1?

• A)Japan has an absolute advantage in motorcycles.
• B)The United States has a comparative advantage in DVD players.
• C)Japan has an absolute advantage in motorcycles,the United States in DVD players.

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Definitions:

Variable Overhead

Costs that fluctuate with production volume, such as utilities and raw materials, contrasting with fixed overhead costs.

Direct Materials

The raw materials that are directly traceable to the manufacturing of a product and included in the cost of the product.

Direct Labor-Hours

The number of labor hours expended directly on the production floor by employees actively engaged in manufacturing processes.

Variable Overhead

Variable overhead are those operating costs that vary with levels of output or activity, including utilities, supplies, and certain labor costs.