Randall Company Manufactures Chocolate Bars Randall's Direct Labor Costs Amounted To:
A) $400,000

question 65

Multiple Choice

Randall Company manufactures chocolate bars.The following were among Randall's manufacturing costs during the current year: $\begin{array}{lrr}\text { Wages }\\ \text { Machine operators } &\$300,000\\ \text { Selline and administrative personnel } &\$75,000\\\text { Materials used }\\ \text { Lubricant for oiling machinery } &\$25,000\\ \text { Cocoa, sugar, and other raw materials } &\$225,000\\ \text {Packaging materials } &\$190,000\\\end{array}$

Randall's direct labor costs amounted to:

• A) $400,000.
• B) $300,000.
• C) $175,000.
• D) $375,000.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to pursue a particular action.

Accounting Costs

Costs that appear on the financial statements of a company.

Economic Decisions

Choices made by individuals, firms, or governments regarding the allocation of resources to optimize benefits.

Sunk Cost

A cost that has already been incurred and cannot be recovered. It should not impact future business decisions because it cannot be changed.