Table 3-6 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes

question 124

Multiple Choice

Table 3-6
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
-Refer to Table 3-6. Assume that Zimbabwe and Portugal each has 180 machine minutes available. If each country divides its time equally between the production of toothbrushes and hairbrushes, then total production is

• A)24 toothbrushes and 12 hairbrushes.
• B)48 toothbrushes and 24 hairbrushes.
• C)96 toothbrushes and 48 hairbrushes.
• D)720 toothbrushes and 1440 hairbrushes.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method where the goods first added to inventory are the first to be sold.

Gross Profit Method

An estimating technique used to calculate inventory cost, based on the gross margin and cost of goods sold.

Gross Profit Ratio

A financial metric indicating the percentage of revenue that exceeds the cost of goods sold; it is calculated by dividing gross profit by net sales.

Ending Inventory

The monetary amount of stock available for purchase at the end of an accounting term, which is the sum of the opening inventory and purchases, less the cost of goods sold.