Diligent Ltd Had 5 Units of the Commodity Algo on Hand

question 38

Multiple Choice

Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September:
- What was the value of ending inventory of Algo,using the LIFO assumption in a perpetual inventory system?

• A) $1460
• B) $1480
• C) $1580
• D) $2400

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Definitions:

Diminishing Returns

The principle stating that if one factor of production is increased while others remain constant, the overall returns will incrementally decrease after a certain point, leading to reduced efficiency.

Decreasing Returns to Scale

A situation in which a proportional increase in all inputs results in a less-than-proportional increase in output.

Cobb-Douglas Production Function

The Cobb-Douglas Production Function is an economic model representing the relationship of an output to inputs, typically showing how labor and capital contribute to the production process in a way that reflects diminishing returns.

Returns to Scale

The rate at which output increases as inputs are increased proportionally in the production process.