A Firm Produces 4,000 Units of Output Using 500 Workers

question 46

Multiple Choice

A firm produces 4,000 units of output using 500 workers.Marginal cost is $10,the wage rate is $160,and total fixed cost is $100,000.When output is 4,000 units,

• A)average variable cost is decreasing.
• B)average variable cost is increasing.
• C)average total cost is decreasing.
• D)average total cost is increasing.
• E)both a and c

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Definitions:

Machining Department

A segment within a manufacturing facility where machining, a process of removing material from a workpiece to create desired shapes and features, takes place.

Machine-Hour

A unit of measure indicating the time a machine is operated to produce goods, often used in allocating manufacturing overhead.

Job Cost

The total cost assigned to a specific job or project, comprising direct materials, direct labor, and allocated overhead.

Manufacturing Costs

Expenses directly related to the production of goods, including labor, materials, and overhead.