Table 3-29 Juanita and Shantala Run a Business That Programs and Tests

question 36

Multiple Choice

Table 3-29
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
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-Refer to Table 3-29. Juanita's opportunity cost of testing one cellular phone is programming

• A)0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
• B)0.133 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.
• C)7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 2.5 cellular phones.
• D)7.5 cellular phones and Shantala's opportunity cost of testing one cellular phone is programming 0.4 cellular phones.

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Definitions:

Net Income

The residual income of a company once every expense and tax payment has been extracted from revenue.

Amortization Expense

The portion of the cost of an intangible asset that is allocated as an expense over its useful life.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded through the normal accounting process.

Net Income

The total profit or loss of a business after all expenses, including taxes and operating costs, have been deducted from revenues.