In the Accompanying Graphs, the Pre-Migration Labor Force in Country

question 218

Multiple Choice

In the accompanying graphs, the pre-migration labor force in country A is 100 and in country B it is 150. After immigration, domestic output in country B will

• A)increase by $50M.
• B)increase by $250M.
• C)decrease by $50M.
• D)decrease by $250M.

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Definitions:

Direct Labor

The labor cost of workers directly involved in the production of goods or services.

Process Costing

An accounting methodology that traces and accumulates direct costs, and allocates indirect costs, of a manufacturing process, costing each process separately.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units that could have been produced with those costs.

Direct Materials

Materials in their unprocessed state that can be directly linked to the production of a particular item.