The Accompanying Table Shows the Output (Either Machines or Wine)

question 258

Multiple Choice

$$\begin{array} { | l | c | c | } \hline & \text { Machines } & \text { Wine } \\\hline \text { France } & 3 & 1 \\\hline \text { Germany } & 1 & 1 \\\hline\end{array}$$ The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that

• A) France has a comparative advantage in producing wine.
• B) Germany has a comparative advantage in producing wine.
• C) neither country has a comparative advantage in producing wine.
• D) Germany can produce machines at a lower opportunity cost than France.

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Definitions:

Adjusting Journal Entry

A journal entry made at the end of an accounting period to record unrecorded income and expenses so that the financial statements are accurate.

Overapplied Overhead

A situation where the allocated manufacturing overhead cost is more than the actual overhead incurred.

Underapplied Overhead

An instance in which the budgeted manufacturing overhead expenses fall short of the real overhead costs experienced.

Estimated Direct Labor

The forecasted amount of labor cost directly associated with the production of goods or services.