If a Business Produces and Sells Only One Unit of a Good

question 17

Multiple Choice

If a business produces and sells only one unit of a good, its profit would be the

• A)price received for the good
• B)price of the product minus the cost of the resources used to produce the product
• C)return paid to the firm's bank on its outstanding loans
• D)price of the product minus the wages paid for the labor used to produce it
• E)wages paid for the labor used to produce the product minus the price

---

Definitions:

Direct Labor Cost

The total cost of all the labor that is directly involved in the production of goods or services, including wages and other related expenses.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from revenue, indicating the efficiency of production and sales activities.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product.

Overhead Rate

A measure used in cost accounting to allocate overhead costs to produced units, typically expressed as a percentage or a ratio.