Costs Assigned to an Activity Pool for Teaching Children to Swim

question 23

Multiple Choice

Costs assigned to an activity pool for teaching children to swim at the Leisure Centre are $2,700 per month. Number of students is chosen as the cost driver. On average, 300 students take swim lessons monthly. What is the ABC allocation rate for this activity?

• A) Not enough information given
• B) $27.00
• C) $9.00
• D) $0.90

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Definitions:

MRP

The additional revenue a firm generates by employing one more unit of input, such as labor or capital, in the production process.

Labor Demand Curve

A graphical representation showing the relationship between the quantity of labor demanded by firms and the wage rate.

Purely Competitive Seller

A market participant that operates in a perfectly competitive market, where no single seller can influence prices or market conditions.

Diminishing Marginal Productivity

A principle in economics stating that as additional units of a variable input are added to a fixed input, the marginal product of the variable input eventually decreases.