If the Relative Price of Pizza in Terms of Movies

question 42

Multiple Choice

If the relative price of pizza in terms of movies is 3, this means that

• A) 3 pizzas can be traded for 9 movies.
• B) the opportunity cost of a pizza is 3 movies.
• C) in terms of the dollars that must be spent to buy the product, pizza is more expensive than movies.
• D) All of the above answers are correct.

---

Definitions:

Activity Costs

Expenses tied to specific activities, such as production or research and development, often used in activity-based costing.

Prevention Cost

Expenses incurred to avoid defects in products or services, including costs associated with quality planning, training, and process control.

Finished Products

Goods that have completed the manufacturing process and are ready for sale to customers.

Cell Conversion Cost

The costs, both direct and indirect, associated with converting raw materials into finished goods within a manufacturing cell.