Travis Can Mow a Lawn in Two Hours or He

question 33

Multiple Choice

Travis can mow a lawn in two hours or he can trim a tree in one hour.Ricardo can mow a lawn in three hours or he can trim a tree in two hours.

• A)Travis has an absolute advantage over Ricardo in trimming trees.
• B)Travis has a comparative advantage over Ricardo in mowing lawns.
• C)Ricardo has a comparative advantage over Travis in trimming trees.
• D)All of the above are correct.

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Definitions:

Weighted-Average Method

An inventory costing method that calculates cost of goods sold based on the weighted average cost of all items available for sale.

Equivalent Unit

An equivalent unit is a concept used in cost accounting to denote the amount of work done on units of production expressed in terms of fully completed units, facilitating the calculation of costs in a process costing environment.

Fabricating Department

A division within a manufacturing company where raw materials are assembled or processed into finished goods.

FIFO Method

An inventory valuation method (First-In, First-Out) where the oldest items in inventory are sold or used first.