Table 9-6 Mateo and Celeste Produce Custom Saddles and Spurs

question 144

Multiple Choice

Table 9-6
Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.
-Refer to Table 9-6. Select the statement that accurately interprets the data in the table.

• A) Mateo has an absolute advantage in making saddles and Celeste has an absolute advantage in making spurs.
• B) Mateo has an absolute advantage in making spurs and Celeste has an absolute advantage in making saddles.
• C) Mateo has an absolute advantage in making spurs.
• D) Celeste has an absolute advantage in making saddles.

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Definitions:

Straight-Line Method

A method of depreciation that allocates an asset's cost evenly throughout its useful life.

Carrying Amount

The value at which an asset or liability is recognized on the balance sheet, calculated as its original cost minus depreciation or amortization.

Useful Life

The period over which an asset is expected to be available for use by an entity; or the number of production or similar units expected to be obtained from the asset by an entity.

Management Fee

A charge levied by an investment manager for managing an investment fund's assets, often calculated as a percentage of the assets under management.