When the Opportunity Cost of Producing Laptops Increases as More

question 56

Multiple Choice

When the opportunity cost of producing laptops increases as more laptops are produced, then:

• A) the law of increasing costs is present.
• B) resources are equally suited to the production of laptops and to other goods.
• C) the production possibilities frontier is a straight line.
• D) the production possibilities frontier becomes positively sloped.

Understand the role of T-accounts in tracking and summarizing transactions related to manufacturing costs including direct materials, direct labor, and manufacturing overhead.

Calculate the cost of goods manufactured and understand its significance in the production process.

Identify and apply the cost flow in a manufacturing environment, including the flow from Raw Materials, Work-in-Process, to Finished Goods.

Calculate and analyze the effect of applied manufacturing overhead on the total manufacturing costs and the final product cost.

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Definitions:

Stock Split

An action by a company to divide its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the company does not change.

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and held in the company's treasury, reducing the amount of outstanding stock.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing shareholders' ownership interest.