If a Monopsonist Offers a Wage of $6, He Finds

question 39

Multiple Choice

If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:

• A) marginal factor cost is $6.
• B) marginal factor cost is $200.
• C) total wage cost is $1,200.
• D) total wage cost is $7,200.

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor, such as utilities, maintenance, and factory supplies.

Job-Order Costing System

An accounting system used to track the costs associated with producing specific jobs or batches, useful for customized orders.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated in advance based on estimated costs.

Variable Manufacturing Overhead

These are manufacturing costs that vary in total directly and proportionately with changes in the production volume, such as indirect materials and utilities.