If Labor Is the Only Variable Input, an Additional Worker

question 47

Multiple Choice

If labor is the only variable input, an additional worker increases output from 72 units to 78 units, and the product price is $6, the marginal revenue product from an additional worker is equal to:​

• A)$6
• B)$36.
• C)$78.
• D)$432.
• E)$72

---

Definitions:

Direct Labor-Hours

The total time workers spend producing a product or performing a service, specifically those directly involved in manufacturing.

Activity-Based Costing

A technique for determining costs that discerns activities in an organization and charges the cost of these activities to all products and services, based on the real amount each consumes.

Unit Product Cost

The total cost incurred to produce a single unit of product, including direct materials, direct labor, and overhead.

Traditional Costing System

An accounting method that allocates overhead costs to products based on a predetermined rate, typically using a single overhead pool.