Exhibit 33-5 ​

question 55

Multiple Choice

Exhibit 33-5
​

-Refer to Exhibit 33-5. Country 1 has a comparative advantage in the production of __________, and country 2 has a comparative advantage in the production of __________.

• A)good A; good B
• B)good B; good A
• C)both goods; neither good
• D)neither good; both goods
• E)neither good; neither good

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Definitions:

Cost System

An accounting method used to track, record, and analyze costs associated with a company's operations, products, or services.

Cost Per Equivalent Unit

A calculation used in process costing that determines the cost allocated to each unit, considering the stage of completion.

Conversion Costs

The costs incurred to convert raw materials into finished products, including direct labor and manufacturing overhead.

Weighted-Average Method

The weighted-average method is a cost accounting technique used to calculate inventory and cost of goods sold by assigning an average cost to each unit, based on the weight of those units in beginning inventory and purchases made.