Table 4-3 -Refer to Table 4-3.The Table Above Lists the Marginal Cost

question 118

Multiple Choice

Table 4-3

-Refer to Table 4-3.The table above lists the marginal cost of polo shirts by Marko's,a firm that specializes in producing men's clothing.If the market price of Marko's polo shirts is $18

• A)Marko's will produce four shirts.
• B)producer surplus from the first shirt is $18.
• C)producer surplus will equal $22.
• D)there will be a surplus; as a result,the price will fall to $7.

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Definitions:

Freight-in

The cost of shipping goods to the buyer's location, which is often included in the inventory cost.

Supplies Expense

The cost associated with the consumption of supplies utilized during an accounting period in the operation of a business.

Sales Discounts

A reduction in the price of a product or service provided by the seller to the buyer, often used as an incentive to encourage prompt payment or to increase sales volume.

Net Sales

The revenue from sales transactions after deductions of returns, allowances for damaged or missing goods, and discounts.