A Firm Produces Handbags Using Three Workers

question 48

Multiple Choice

A firm produces handbags using three workers. On Tuesday, Jane completed 60 bags in 6 hours, Ron completed 50 bags in 7 hours, and Mary completed 80 bags in 5 hours. What was the overall productivity of the firm?

• A) 7.92 bags/hour
• B) 11.05 bags/hour
• C) 10.00 bags/hour
• D) 10.56 bags/hour
• E) 61.67 bags/hour

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Definitions:

Unit Product Cost

The total cost associated with producing one unit of a product, including both variable and fixed costs.

Variable Costing

An accounting method that includes only variable production costs (direct labor, direct materials, and variable manufacturing overhead) in product costs.

Cost-Volume-Profit Analysis

An accounting technique used to determine how changes in costs and sales volume affect a company's operating income and net income.

Absorption Costing

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