If the Average Product of Labor Equals the Marginal Product

question 12

Multiple Choice

If the average product of labor equals the marginal product of labor,then

• A)the average product of labor is at a maximum.
• B)the marginal product of labor is at a maximum.
• C)Both A and B above.
• D)Neither A nor B above.

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Definitions:

Direct Labor-Hours

The total hours worked directly on a product by employees.

Plantwide Predetermined Rate

A single overhead absorption rate used throughout an entire factory or plant for allocating overhead costs to products.

Manufacturing Overhead

All indirect costs related to the manufacturing process, including costs of indirect materials, indirect labor, and other expenses that are not directly tied to the production of goods.

Machine-Hours

A measurement unit representing the number of hours a machine is operational and working on production tasks.