An Automobile Company Has Two Factories, One in Vietnam and One

question 59

Multiple Choice

An automobile company has two factories, one in Vietnam and one in Australia, each with the same number of workers. The Vietnamese factory can produce either 150 engines or 100 transmissions per day. The Australian factory can produce either 100 engines or 75 transmissions per day.

• A)The Australian factory has an comparative advantage producing both engines and transmissions.
• B)The Australian factory has an absolute advantage in the production of transmissions.
• C)The Vietnamese factory has a comparative advantage in the production of engines.
• D)The Australian factory has a comparative advantage in the production of engines.

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Definitions:

Estimated Costs

Costs that are predicted based on historical data, trends, and analyses, used for budgeting, planning, and decision-making purposes.

Cost To Sell

The expenses directly associated with the disposal of an asset, excluding financing costs and income taxes.

Fair Value Movements

describes changes in the fair value of an asset or liability over time, which may be recognized in profit or loss or other comprehensive income.

AASB 141

The Australian Accounting Standards Board document that outlines the accounting treatment for agricultural activity.