Table 3-13 Juanita and Shantala Run a Business That Programs and Tests

question 182

Multiple Choice

Table 3-13
Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.
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-Refer to Table 3-13. Which of the following points would be on Shantala's production possibilities frontier, based on a 40-hour week?

• A)(120 cellular phones programmed, 250 cellular phones tested)
• B)(180 cellular phones programmed, 150 cellular phones tested)
• C)(240 cellular phones programmed, 600 cellular phones tested)
• D)More than one of the above would be on Shantala's production possibilities frontier.

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Definitions:

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Purchases Account

A ledger account in which the total amount of goods purchased during a period is recorded.

Current Cost Accounting System

An accounting approach that records assets and liabilities at their current market value instead of their historical cost.

Unrealized Holding Gains

Increases in the value of assets that an entity holds but has not yet sold, and thus are not reflected in the income statement until sold.