The Value of Marginal Product Is Equal to the

question 48

Multiple Choice

The value of marginal product is equal to the

• A) additional revenue from selling one more unit of the product.
• B) change in total revenue from selling one more unit of product.
• C) additional cost of hiring one more unit of a factor of production.
• D) change in revenue from hiring one more unit of a factor of production.
• E) change in total cost when one more unit of the product is produced.

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Definitions:

Variable Manufacturing

Costs that vary directly with the level of production, such as raw materials and direct labor costs, as opposed to fixed manufacturing costs.

Fixed Manufacturing

Costs associated with manufacturing that remain constant, regardless of the level of production, such as rent, salaries, and equipment depreciation.

Flexible Budget

A budget that adjusts or varies with changes in volume or activity, providing a valuable tool for performance evaluation.

Master Budget

A master budget integrates various financial plans and forecasts of a company, serving as a comprehensive financial framework for the upcoming fiscal period.