Each Unit of Product Requires 16 Pounds of Material

question 91

Multiple Choice

Each unit of product requires 16 pounds of material. Due to scrap and rework, each unit has been averaging 18 pounds of material. The material costs $4 per pound. The non-value-added costs are

• A)$8.
• B)$4.
• C)$64.
• D)$72.

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Definitions:

Long-run Supply Curve

A graphical representation showing the relationship between market price and the amount of goods supplied by producers, considering all factors of production can be varied.

Competitive Industry

An industry with many firms competing against each other, with no single firm dominating the market.

Relevant Resources

Resources that are directly applicable and valuable in achieving a specific goal or solving a particular problem.

Decreasing-cost Industry

An industry in which costs per unit decrease as the scale of production increases.