Table 2-15 Table 2-15 Shows the Output Per Day of Day

question 489

Multiple Choice

Table 2-15
Table 2-15 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens.
-Refer to Table 2-15. Which of the following statements is true?

• A) Jack has a comparative advantage in both tasks.
• B) George has a comparative advantage in both tasks.
• C) Jack has a comparative advantage in lawn mowing and George in garden cultivating.
• D) Jack has a comparative advantage in garden cultivating and George in lawn mowing.

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Definitions:

Direct Material Used

The raw materials that are directly included in the finished product, easily traceable to specific goods or batches of goods.

Variable Manuf. Overhead

Expenses associated with manufacturing that vary directly with the level of production output, such as materials and utilities.

Standard Variable Overhead Rate

A predetermined rate applied to estimate the variable overheads based on a specific activity base.

Standard Hours Per Unit

The estimated time required to produce one unit of a product under standard operating conditions.