Use the Following for Questions 37-43

question 129

Multiple Choice

Use the following for questions 37-43.
Exhibit: Total Product

-(Exhibit: Total Product) When hiring units of labor between zero and L₁ units of labor, which of the following statements is true?

• A) The marginal product of labor is increasing.
• B) The marginal product of labor is decreasing.
• C) Total product is increasing at a diminishing rate.
• D) None of the above statements is true.

---

Definitions:

Direct Materials Used

The cost of raw materials that are consumed in the manufacturing process of a product during a specific period.

Total Manufacturing Costs

The sum of all costs directly involved in the production of goods, including raw materials, direct labor, and manufacturing overhead.

Overhead Application Rate

A rate used to allocate overhead costs to products or cost objects based on a predetermined formula.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing or producing a company's products.