How Is the Cost of a Batch-Level Activity Similar to the Cost

question 117

Multiple Choice

How is the cost of a batch-level activity similar to the cost of a unit-level activity?

• A)Both are incurred for each individual unit.
• B)Both decrease as production volume increases.
• C)Both increase as production volume increases.
• D)Both are incurred for a group of units all at once.

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Definitions:

MRP

Marginal Revenue Product, which is the additional revenue generated by employing one more unit of a resource, such as labor or capital.

Marginal Revenue Product

The supplementary income produced by the application of one more unit of a factor or resource in production.

Wage Rate

The amount of compensation an employee receives per unit of time or per task completed, typically expressed in terms of dollars per hour.

Marginal Revenue Product

The supplementary income derived from the deployment of an extra unit of a production resource, like manpower or assets.