A Local Street Festival That Previously Sold Bracelets in Exchange

question 12

Multiple Choice

A local street festival that previously sold bracelets in exchange for unlimited alcohol consumption is now concerned about the overconsumption of alcohol.If they switch to selling tickets per drink,will overall consumption at next year's festival decrease?

• A) No, because the marginal cost per extra beer will decrease for consumers.
• B) No, because the marginal cost per extra beer will increase for consumers.
• C) Yes, because the marginal cost per extra beer will increase for consumers.
• D) Yes, because the marginal benefit per extra beer will increase for consumers.

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Definitions:

Standard Labor Cost

The predetermined cost of labor assumed in the production of goods or services, used for budgeting and measuring efficiency.

Journalize

The process of recording transactions in a company's journal, detailing the accounts affected and the amounts, as the first step in the accounting cycle.

Direct Labor Hours

The total hours worked by employees directly involved in the production process of goods or services.

Standard Unit Cost

The fixed cost calculated to produce one unit of a product, including labor, materials, and overhead.