According to the Law of Diminishing Marginal Returns,as Additional Units

question 32

Multiple Choice

According to the Law of Diminishing Marginal Returns,as additional units of one input are employed as all other inputs are held constant,total output will eventually ______.

• A) Decrease
• B) Increase at an increasing rate
• C) Increase at a decreasing rate
• D) Increase at a constant rate

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Definitions:

Direct Materials Cost

The cost of raw materials directly involved in the production of goods, easily traceable to specific products.

Activity-Based Costing

An approach in cost calculation that pinpoints various activities in a company and apportions the expenses of these activities to products and services, reflective of their actual utilization levels.

Direct Labor-Hours

The total hours of labor directly involved in the manufacturing process, crucial for calculating labor costs and production efficiency.

Direct Materials Cost

The cost of raw materials that can be directly attributed to the production of goods.