Table 3-9 Barb and Jim Run a Business That Sets Up and Up

question 138

Multiple Choice

Table 3-9
Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies.

-Refer to Table 3-9.Barb's opportunity cost of testing one computer is setting up

• A) 4/5 computer and Jim's opportunity cost of testing one computer is setting up 3/4 computer.
• B) 4/5 computer and Jim's opportunity cost of testing one computer is setting up 4/3 computers.
• C) 5/4 computers and Jim's opportunity cost of testing one computer is setting up 3/4 computer.
• D) 5/4 computers and Jim's opportunity cost of testing one computer is setting up 4/3 computers.

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Definitions:

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the cost of goods sold.

Annual Rate Of Return

The percentage of profit or loss on an investment over a one-year period.

Accumulated Depreciation

The total amount of a tangible fixed asset's cost that has been charged to depreciation expense since the asset was acquired.