The Following Table Shows Per-Day Production Data of Rice and T-Shirts

question 9

Multiple Choice

The following table shows per-day production data of rice and T-shirts for two countries, Cambria and Bodoni. Based on the table, it can be said that the opportunity cost of 1 ton of rice in Cambria is _____.

• A) 3 T-shirts
• B) 10 T-shirts
• C) 20 T-shirts
• D) 30 T-shirts
• E) 40 T-shirts

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Definitions:

Net Operating Income

The profit derived from a company's everyday operations, calculated by subtracting operating expenses from gross profit.

Planning Budget

A budget prepared for a specific level of activity; it can be adjusted to reflect various levels of operation.

Labor Rate Variance

A financial measure that compares the actual cost of labor to the expected or standard cost, indicating how well a company manages its labor expenses.

Labor Efficiency Variance

A measure of the difference between the actual hours worked by employees and the expected hours worked, multiplied by the standard labor rate.