Table 2-18 Table 2-18 Shows the Output Per Week of Week

question 434

Multiple Choice

Table 2-18
Table 2-18 shows the output per week of two people, Minnie and Mickey. They can either devote their time to making hats or making umbrellas.
-Refer to Table 2-18. Which of the following statements is true?

• A) Mickey has an absolute advantage in making both products.
• B) Minnie has an absolute advantage in making both products.
• C) Minnie has an absolute advantage in making hats and Mickey in making umbrellas.
• D) Minnie has an absolute advantage in making umbrellas and Mickey in making hats.

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Definitions:

Decision Making

The process of choosing among multiple options or courses of action, based on factors such as data analysis, strategic goals, and resource availability.

Cost Driver

A factor that causes the cost of an activity or process to change, used in activity-based costing to allocate overheads more accurately.

Responsibility Centre

A unit or department within an organization, headed by a manager, who is accountable for its activities and financial performance.

Direct Costs

Expenses that can be directly attributed to the production of a specific product or service, such as materials and labor.