Wayne's Jacket Shop Sells Wayne's Jackets for $20 Each

question 341

Multiple Choice

Wayne's Jacket Shop sells Wayne's jackets for $20 each. Wayne finds that when he hires different numbers of workers, the corresponding total revenues are as shown in the table. What is the marginal revenue product of the third worker?

• A)$600
• B)$667
• C)$400
• D)$6,000

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Definitions:

Overhead Cost

Expenses related to the day-to-day running of a business that are not directly tied to a specific product or service.

Supply Costs

The expenses incurred in acquiring the materials and services necessary for production or operations.

Square Feet

A unit of area measurement equal to a square that measures one foot on each side, commonly used in the United States.

Spending Variance

is the difference between the actual amount spent on materials, labor, or overhead and the budgeted amount for these items.