Figure 13-2 -Refer to Figure 13-2. as the Number of Workers Increases

question 186

Multiple Choice

Figure 13-2
-Refer to Figure 13-2. As the number of workers increases,

• A)marginal product decreases.
• B)total output decreases.
• C)marginal product increases but at a decreasing rate.
• D)Both a and b are correct.

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Definitions:

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit on hand, calculated by dividing total cost of goods available for sale by total units available.

Work in Process Inventory

An account on the balance sheet that represents the cost of raw materials, labor, and overhead for products that are in production but not yet complete.

Equivalent Costs

The concept in cost accounting that represents the cost of materials, labor, and overheads in partially finished goods, expressed in terms of fully finished goods.

Conversion Cost

Conversion Cost refers to the combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished products.