Table 1-6 Ivan Runs a Custom Jewelry Shop in Sparkle

question 457

Multiple Choice

Table 1-6
Ivan runs a custom jewelry shop in Sparkle City. He is debating whether he should extend his hours of operation. Ivan figures that his sales revenue will depend on the number of additional hours the jewelry shop is open as shown in the table above. He would have to hire a worker for those hours at a wage rate of $25 per hour.
-Refer to Table 1-6. What is Ivan's marginal benefit if he decides to stay open for six hours instead of five hours?

• A) $10
• B) $20
• C) $30
• D) $91.67

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Definitions:

Conversion Cost

The sum of direct labor and manufacturing overhead costs that are required to transform raw materials into finished goods.

Depreciation

The methodical distribution of the expense of a physical asset throughout its expected lifespan.

Oven

An enclosed compartment, usually part of a stove, used for cooking and baking.

Factory Supplies

Items used in the manufacturing process that are not directly part of the final product, including cleaning supplies, tools, and machinery maintenance materials.