If the Inputs for a Product Add Up to $750

question 38

Multiple Choice

If the inputs for a product add up to $750 and the outputs are $1500, then productivity is ____. If the company doubles its output, then productivity is _____

• A) 2:1, 1:2
• B) 2:1, 1:2.
• C) 4:1, 1:4
• D) 2:1, 4:1

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Definitions:

Margin of Safety

A financial metric that measures the difference between actual sales and the break-even point, indicating risk level.

Variable Expenses

Expenses that vary directly with changes in production volume or business activity levels.

Fixed Expenses

Costs that do not vary in the short term, regardless of the level of goods or services produced by the business.

Actual Sales

The total revenue a company generates from selling its goods or services, as opposed to projected or forecasted sales.