The Data in the Table Below Assumes That with the Same

question 77

Multiple Choice

The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers. Australia can make 1,000 computers or 2,000 units of food in a day, and the Philippines can make 200 computers or 1,200 units of food in a day.
Table 20.2

-According to Table 20.2, what is the opportunity cost of 1 computer in Australia?

• A) half a unit of food
• B) one-sixth of a unit of food
• C) 1 unit of food
• D) 6 units of food
• E) 2 units of food

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Definitions:

Fixed Overhead Costs

Fixed costs that stay the same no matter how much is produced or sold, including items like rent, salaries, and insurance policies.

Operating Capacity

The maximum level of activity that a company can sustain with its current resources and infrastructure without incurring additional costs.

Investment Center

A business unit or department that is responsible for its own revenues, expenses, and investment in assets, with its performance measured by its return on investment.

Controllable Margin

The portion of profit or income directly influenced by the management decisions, typically excluding fixed costs.