Use the Figure to Answer the Following Question(s)

question 45

Multiple Choice

Use the figure to answer the following question(s) .
Figure 9-9

The average total cost ( ATC ) and marginal costs ( MC ) of a firm producing in a price-taker industry are depicted in Figure 9-9. If the current market price of the firm's product is $50, what output should this firm produce per day?

• A) 10
• B) 15
• C) 20
• D) 25

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Definitions:

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain level of output, multiplied by the standard labour rate.

Quality Raw Materials

High-standard, unprocessed or minimally processed inputs used in the production of goods, directly affecting the quality of the finished product.

Labour Time Standard

A benchmark or norm established for the amount of time required to perform a specific task or activity under normal working conditions.

Direct Material Price Variance

The difference between the actual cost of direct materials and the expected (or standard) cost.