The Amount by Which an Additional Unit of a Factor

question 117

Multiple Choice

The amount by which an additional unit of a factor increases the firm's total revenue during a period is:

• A) marginal revenue product.
• B) average product.
• C) marginal factor cost.
• D) marginal physical product.

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Definitions:

Standard Cost Card

A document that details the expected costs associated with the production of a product, including direct materials, direct labor, and overhead costs, used for budgeting and variance analysis.

Variance Columns

Columns in financial reporting and analysis designed to show the difference between actual results and budgeted, planned, or standard figures, helping identify areas of over or underperformance.

Raw Materials

Basic materials and substances used in the initial stages of production before undergoing further processing or manufacturing.

Materials Price Variance

The difference between the actual cost of raw materials and the expected (or standard) cost, which can indicate purchasing efficiency.