Table 3-4 Assume That the Farmer and the Rancher Can Switch Between

question 398

Multiple Choice

Table 3-4
Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate.

-Refer to Table 3-4.Assume that the farmer and the rancher each has 24 labor hours available.If each person divides his time equally between the production of meat and potatoes,then total production is

• A) 3 pounds of meat and 12 pounds of potatoes.
• B) 5.5 pounds of meat and 8 pounds of potatoes.
• C) 8 pounds of meat and 4 pounds of potatoes.
• D) 11 pounds of meat and 16 pounds of potatoes.

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Definitions:

Cost Driver

Any factor which causes a change in the cost of an activity, influencing the costs of business operations directly.

High-low Method

An approach used in cost accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.

Electricity Cost

The amount charged for the consumption of electric power, which can vary based on factors like usage, time of use, and geographical location.

Machine Hours

A measure of production time, calculated by counting the number of hours machines are operating.