-Refer to Exhibit 34-1

question 35

Multiple Choice

-Refer to Exhibit 34-1.The opportunity cost of one unit of X in country B is

• A) 1 unit of Y.
• B) 0.33 units of Y.
• C) 2 units of Y.
• D) 20 units of Y.

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Definitions:

Variable Factory Overhead

This includes costs of factory operations that vary directly with the volume of output, such as utilities and supplies used in production.

Fixed Factory Overhead

Regular, consistent costs associated with operating a manufacturing facility that do not fluctuate with production volume.

Direct Labour

The cost of wages for workers directly involved in the manufacture of products or the delivery of services.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as factory rent and salaries of permanent staff.