(Figure: Gizmos and Gadgets) Based on the Graph, We See

question 36

Multiple Choice

(Figure: Gizmos and Gadgets) Based on the graph, we see that the opportunity cost of 1 gizmo is

• A) 1 gadget.
• B) 2 gadgets.
• C) 25,000 gadgets.
• D) 50,000 gadgets.

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Definitions:

Cost Per Unit

The total expense incurred in manufacturing or acquiring a product divided by the number of units.

Purchased

Acquired in exchange for money or its equivalent; obtaining ownership of a good or service.

Days' Sales

A financial ratio that measures the average time it takes a company to convert its inventory into sales.

Ending Inventory

The total value of all inventory, including raw materials, work-in-progress, and finished goods, held by a company at the end of an accounting period.