Table 3-15 ​ ​

question 458

Multiple Choice

Table 3-15
​ ​
-Refer to Table 3-15. Assume that the farmer and the rancher each has 40 labor hours available. If each person divides his time equally between the production of meat and potatoes, then total production is

• A)5 pounds of meat and 4 pounds of potatoes.
• B)6 pounds of meat and 7.5 pounds of potatoes.
• C)7.5 pounds of meat and 6 pounds of potatoes.
• D)10 pounds of meat and 8 pounds of potatoes.

---

Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Eliminate

To completely remove or get rid of something.

Activity-Based Costing

A costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each, to more accurately measure the cost and profitability of products/services.

Relevant Cost

A cost that should be considered when making decisions.