Table 13-2 -Refer to Table 13-2.Adrianne Has Received an Order for 3000

question 16

Multiple Choice

Table 13-2
-Refer to Table 13-2.Adrianne has received an order for 3000 boxes of chocolates for next week.Suppose she expects that the trend in the marginal product (MP) of labour will continue in the same direction.What is most likely her best decision

• A)not commit to meeting the order until she can move to a larger room and hire more workers to box the chocolates
• B)close her business until she is able to hire more productive workers
• C)hire about 12 new workers and hope she can satisfy the order
• D)commit to meeting the order and then take three weeks to complete the job

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Definitions:

Direct Labor Cost

The total cost of workforce expenses directly involved in the manufacturing of products or delivery of services, excluding indirect labor costs.

Absorption Costing

A costing methodology in accounting that factors in all costs associated with manufacturing, such as direct materials, direct labor, along with both variable and fixed overheads, into the product's cost.

Unit Product Cost

Unit product cost is the total cost to produce one unit of product, calculated by dividing total production costs by the number of units produced.

Direct Labor Cost

The total amount of money a company spends on wages for employees who are directly involved in the manufacturing of products or providing services.