Copy Center Pays an Average Wage of $12 Per Hour

question 136

Multiple Choice

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs,and allocates $18 of overhead for each employee hour worked.Direct materials are assigned to each job according to actual cost.Jobs are marked up 20% above total manufacturing cost to determine the selling price.If Job M-47 used $350 of direct materials and took 20 direct hours of labor to complete,what is the selling price of the job?

• A)$852
• B)$1,140
• C)$456
• D)$720
• E)$708

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Definitions:

Production Function

An equation or model that describes the relationship between inputs used in production and the output produced.

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will incrementally decrease after a certain point, leading to reduced efficiency.

Decreasing Returns to Scale

A situation in which a proportional increase in all inputs results in a less-than-proportional increase in output.

Cobb-Douglas Production Function

The Cobb-Douglas Production Function is an economic model representing the relationship of an output to inputs, typically showing how labor and capital contribute to the production process in a way that reflects diminishing returns.