If a Firm Finds That, at Its Current Level of Employment

question 320

Multiple Choice

If a firm finds that, at its current level of employment, VMP < W, then it has

• A) reached maximum profits.
• B) reached minimum profits.
• C) not hired enough labor to maximize its profit.
• D) hired too much labor to maximize its profit.

---

Definitions:

Overapplied Overhead

A situation in which overhead assigned to work in process is greater than the overhead incurred.

Finished Goods Inventory

Items that have completed the manufacturing process but have not yet been sold to customers.

Jobs Completed

Refers to work or projects that have been fully finished or executed, especially in a manufacturing or service-oriented business context.

Process Cost System

A method of accounting used by companies that produce similar or identical goods continuously, allocating production costs to products based on the process they go through.