When Several Resources Are Combined in the Production of a Good

question 142

Multiple Choice

When several resources are combined in the production of a good,

• A)it is easy to determine the marginal products of the various resources
• B)the marginal contribution of each input often cannot be observed
• C)allocating revenue among the various resources is easy
• D)there is more competition for each of the resources used
• E)there is less competition for each of the resources used

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Definitions:

Conversion Costs

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

Direct Materials

The raw materials that are consumed in the manufacturing process and are directly allocated to the product.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as maintenance, utilities, and equipment depreciation.

Management Process

The five basic management functions of (1) planning, (2) directing, (3) controlling, (4) improving, and (5) decision making.