If Diminishing Marginal Returns Have Already Set in for Golden

question 182

Multiple Choice

If diminishing marginal returns have already set in for Golden Lark Woodworks,and the marginal product of the sixth carpenter is eight chairs,what is the marginal product of the seventh carpenter?

• A) Negative
• B) Less than eight chairs
• C) More than eight chairs
• D) Zero

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Definitions:

Gross Profit Method

An inventory costing method to estimate the cost of goods sold and ending inventory, which calculates gross profit by subtracting the cost of goods sold from net sales.

FIFO Method

"First In, First Out," an inventory valuation method assuming that the first items purchased are the first ones sold, affecting the cost of goods sold and inventory value.

Cost Flow Method

An accounting technique used to value inventory and determine the cost of goods sold by assuming a flow of costs.

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for goods and their transportation costs as soon as the goods leave the seller's premises.