Table 2.2 -Krystal Runs a Nail Salon and Needs to Decide How

question 106

Multiple Choice

Table 2.2

-Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that Krystal's marginal benefit of staying open per hour is $18. If she is following the marginal principle, how many hours should Krystal stay open?

• A) 3 hours
• B) 4 hours
• C) 6 hours
• D) 7 hours

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Definitions:

Total Cost

The sum of fixed and variable costs incurred in the production of goods or services.

Patio Chairs

Outdoor chairs designed for use on a patio, garden, or any outdoor setting, often made from weather-resistant materials.

Activity-Based Costing System

A costing method that assigns overhead and indirect costs to specific products or activities based on their use of resources.

Activity Cost

The expense associated with carrying out a specific activity, such as manufacturing a product or delivering a service.