Three Accountants Can Prepare 5 Tax Returns a Day and Four

question 79

Multiple Choice

Three accountants can prepare 5 tax returns a day and four accountants can prepare 7 tax returns a day.If the marginal revenue product of hiring the fourth accountant is $300,then in a perfectly competitive product market the price of each tax return is

• A)$250
• B)$100
• C)$300
• D)$200
• E)$150

---

Definitions:

Conversion Costs

Costs incurred in the process of converting raw materials into finished goods, primarily comprising direct labor and manufacturing overhead.

Equivalent Units

A concept used in cost accounting to express the amount of materials, labor, or overhead costs in terms of fully completed units of production during a specific time period.

First-In, First-Out

An inventory valuation method where the first items placed in inventory are the first sold.

Direct Materials

Direct materials are raw materials that are directly used in the manufacturing of a product and are easily traceable to the product being manufactured.