The Following Table Shows the Utility (Measured in Dollars)which Lisa

question 54

Multiple Choice

The following table shows the utility (measured in dollars) which Lisa derives from water (in 50 litre drums) and diamonds (uncut 1 carat stones) .

-Refer to the above information to answer this question.If the price of both water and diamonds is $120 per unit,and Lisa has $720 to spend,how many units of each would she purchase?

• A)6 water.
• B)4 water and 2 diamonds.
• C)3 water and 3 diamonds.
• D)2 water and 3 diamonds.
• E)2 water and 4 diamonds.

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Definitions:

Raw Materials Inventory

The stock of basic materials and components that are required in the manufacturing process before they are transformed into finished goods.

Purchase

The acquisition of goods or services in exchange for money, representing a transaction that increases inventory or assets for a business.

Process Costing System

An accounting method used to assign production costs to units of output, typically used in manufacturing environments where products are indistinguishable from one another.

Maintenance Workers

Individuals responsible for the upkeep, repair, and maintenance of buildings, equipment, and machinery to ensure efficient operations.