To Produce a Unit of Output, Alphaworks Uses 10 Hours

question 93

Multiple Choice

To produce a unit of output, Alphaworks uses 10 hours of labour and 5 kilograms of material. Betaworks uses 5 hours of labour and 10 kilograms of material, and Gammaworks uses 10 hours of labour and 10 kilograms of material. If labour costs $10 per hour and material costs $5 per kilogram, which firm is economically efficient?

• A)Alphaworks only
• B)Betaworks only
• C)Gammaworks only
• D)Alphaworks and Betaworks
• E)Alphaworks and Gammaworks

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Definitions:

Intragroup Transaction

Transactions between companies that are part of the same corporate group, which must be eliminated in the consolidated financial statements.

NCI Adjustment

A modification made to reflect changes in the non-controlling interest's share of equity in a subsidiary.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on their income or assets.

Inventory

The goods and materials a business holds for the purpose of resale or production.