The Following Table Shows the Relationship Between the Speed of a Computer's

question 6

Multiple Choice

The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation) , and only the CPU speeds listed below are available for purchase. $$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { CPU } \\\mathrm { GHz }\end{array} & \begin{array} { c } \text { Total } \\\text { Benefit }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Benefit }\end{array} & \begin{array} { c } \text { Total } \\\text { Cost }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Cost }\end{array} \\\hline 2.0 & \$ 1,000 & & \$ 900 & \\\hline 2.5 & \$ 1,400 & & & \$ 100 \\\hline 3.0 & & \$ 300 & \$ 1,200 & \\\hline 3.5 & \$ 1,900 & & \$ 1,500 & \\\hline 4.0 & \$ 2,000 & & & \$ 400 \\\hline\end{array}$$ The marginal benefit of upgrading from a 2.0GHz computer to a 2.5GHz computer is:

• A)$1,400.
• B)$1,000.
• C)$400.
• D)$100.

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Definitions:

Unit Product Cost

The total cost to produce one unit of a product, including direct materials, direct labor, and manufacturing overhead.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, highlighting net profit or loss.

Variable Costing

An accounting method that only considers variable costs (costs that vary with production volume) in determining product costs and profitability.

Direct Labor Cost

The total expense for labor directly involved in the manufacturing of products, including wages and other associated costs.