Product Costs

question 114

Multiple Choice

Product costs

• A) appear only on the balance sheet
• B) appear only on the income statement
• C) are expensed as costs are incurred for direct labor, direct material, and factory overhead
• D) appear on both the income statement and balance sheet

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Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology constraints.

Marginal Rate Of Transformation

The rate at which one good must be sacrificed in order to produce an additional unit of another good, assuming efficient use of resources.

World Price Ratio

The rate at which quantities of goods from two countries are traded for each other.

Production Possibilities Frontier

A graph that represents all the highest production potentials for two products, based on a group of inputs that include resources and various factors.