Suppose You Produce 10 Bikes a Day for a Total

question 261

Multiple Choice

Suppose you produce 10 bikes a day for a total cost of $1,000. Total costs increase to $1,100 when you produce 15 bikes. Finally, total costs increase to $1,300 if you make 20 bikes. A graph showing the relationship between total costs and the number of bikes produced would be

• A) a negatively-sloped line that becomes steeper.
• B) a positively-sloped line that becomes steeper.
• C) a negatively-sloped line that becomes flatter.
• D) a positively-sloped line that becomes flatter.

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Definitions:

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including labor, material, and overhead costs.

Cost Information

Data related to the amount spent on the production, operation, or acquisition of a product or service.

Raw Materials Inventory Turnover

A ratio that measures how many times a company's inventory of raw materials is used and replaced over a specific period.

Materials Inventory

The total cost of all components, parts, and raw materials stored and used in the production of finished goods.