-Based on the Production Function in the Above Figure, Which

question 119

Multiple Choice

-Based on the production function in the above figure, which of the following is an attainable combination of labor and real GDP?
I. 300 billion hours of labor and real GDP of $15 trillion
Ii. 300 billion hours of labor and real GDP of $6 trillion
Iii. 100 billion hours of labor and real GDP of $12 trillion

• A)i only
• B)ii only
• C)iii only
• D)ii and iii
• E)i and ii

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Definitions:

Direct Labour Dollars

The total amount of money spent on wages for workers who are directly involved in the manufacturing process.

Overhead Allocation Bases

Criteria or measures used to distribute indirect costs to different products, services, or departments.

Direct Labour Hours

The total hours worked by employees that are directly involved in the manufacturing process.

ABC System

Activity-Based Costing System; a method of allocating overhead and indirect costs to specific products or services based on the activities they require.