This Graph Describes the Production Possibilities on the Island of Genovia

question 78

Multiple Choice

This graph describes the production possibilities on the island of Genovia:
The opportunity cost of producing one car in Genovia is:

• A) 5,000 tons of agricultural products.
• B) 500 tons of agricultural products.
• C) 5 tons of agricultural products.
• D) 50 tons of agricultural products.

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Definitions:

Variable Manufacturing Overhead

Expenses that vary with production volume, such as utilities and materials.

Job Cost

The total expense calculated for a specific job or project, including materials, labor, and overhead.

Unit Product Cost

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

Predetermined Overhead Rate

A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.