The Accompanying Table Shows Labor-Productivity ?Gures in Two Countries Facing

question 314

Multiple Choice

$$\begin{array} { | c | c | c | } \hline & \begin{array} { c } \text { Meat per Worker } \\\text { per Day }\end{array} & \begin{array} { c } \text { Houses per } \\\text { Worker per Day }\end{array} \\\hline A & 40 & 80 \\\hline B & 10 & 40 \\\hline\end{array}$$ The accompanying table shows labor-productivity ?gures in two countries facing constant costs. It can be deduced that

• A) country A has the absolute advantage in producing both meat and houses.
• B) country B has the absolute advantage in producing both meat and houses.
• C) country A has a comparative advantage in producing both meat and houses.
• D) country B has a comparative advantage in producing both meat and houses.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate product costing.

Production Activity Costs

The expenses directly associated with the manufacturing process, including labor, materials, and overhead.

Cost Drivers

Factors that cause the cost of activities to increase or decrease, ultimately affecting the overall costs of products or services.

Direct Method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.