Answer the Question on the Basis of the Following Information

question 90

Multiple Choice

Answer the question on the basis of the following information for Manfred's Shoe Shine Parlor.Assume Manfred hires labor,its only variable input,under purely competitive conditions.Shoe shines are also sold competitively. $\begin{array}{c}\begin{array}{c} \text {Units of}\\\underline{\text {Labor}}\\0\\1\\2\\3\\4\\5\\6\\7\end{array}\begin{array}{c}\text {Total}\\\underline{\text {Product}}\\0\\14\\\\30\\35\\39\\\\44\end{array}\begin{array}{c}\text {Marginal}\\\underline{\text {Product}}\\\\14\\10\\\\\\\\\\2\end{array}\begin{array}{c}\text {Total}\\\underline{\text {Revenue}}\\\\\$ 42 \\\\90\\\\117\\126\\132\end{array}\end{array}$
Refer to the given data.What is the marginal product of the sixth worker?

• A) 2 units.
• B) 3 units.
• C) 4 units.
• D) 5 units.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity allowed, multiplied by the standard cost per unit.

Direct Labor Rate

The rate paid for the labor time per unit of work or hour worked by an employee directly involved in production.

Cost Drivers

Factors that cause the cost of an activity or process to change, affecting the overall cost of production.

Budgets

Financial plans that estimate income and expenditures for a specific period, often used for planning and control purposes.