Given the Following Table, How Many Workers Should Be Hired

question 81

Multiple Choice

Given the following table, how many workers should be hired to maximize profits?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs (direct labor, direct materials, and both variable and fixed overhead) in the cost of a product.

Variable Costing

An accounting method that considers only variable costs for product costing, excluding fixed manufacturing overhead from the cost of goods sold.

Income Statement

A financial report that shows the company's revenues and expenses over a specified period, resulting in net profit or loss.

Absorption Costing

A financial approach that incorporates every aspect of manufacturing expenses, such as direct materials, direct labor, and all variable and fixed overhead costs, into the price of a product.