A Manufacturing Company Pays an Assembly Line Worker $12 Per

question 81

Multiple Choice

A manufacturing company pays an assembly line worker $12 per hour. What is the proper classification of this labor cost?

• A)variable cost
• B)semivariable cost
• C)fixed cost
• D)mixed cost

Distinguish between fixed and variable inputs and understand their roles in production over different time frames.

Recognize the significance of zero economic profits and what it implies about a firm’s performance relative to its alternatives.

Understand the conditions under which firms will enter or exit an industry based on economic profits.

Determine the effects of variable resource additions to fixed resources on production and cost.

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Definitions:

Units Produced

The total quantity of finished goods manufactured by a company during a specific period.

Incremental Manufacturing Cost

The additional costs incurred when manufacturing one additional unit of a product, essential for decision-making in production and pricing.

Units Produced

The total number of complete units that are manufactured during a specific period.

Indirect Manufacturing Cost

Costs related to production that cannot be directly attributed to specific products, such as maintenance, utilities, and supervision.