Figure 18-2 The Figure Below Shows the Production Function for a Particular

question 72

Multiple Choice

Figure 18-2
The figure below shows the production function for a particular firm.
-Refer to Figure 18-2. Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit. How many units of labor should the firm hire to maximize profit?

• A)2 units
• B)3 units
• C)4 units
• D)5 units

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Definitions:

Direct Labor

The cost of wages and benefits for the employees directly involved in the production of goods or services.

Process Cost Systems

A method in accounting used to track the costs associated with producing products in continuous processes.

Cost Data

Information related to the cost of goods or services, including production, labor, and materials costs.

Job Order

A custom or special order detailing the work to be performed or products to be produced.