Barron's Corp

question 111

Multiple Choice

Barron's Corp. manufactures custom made wire baskets used to hold computer components in computer manufacturing operations. Wages:
Machine operators $400,000
Maintenance workers 45,000
Factory supervisors 90,000
Materials used:
Metal wire $600,000
Lubricant for oiling machines 5,000
Clear plastic coating 420,000
Barron's direct material costs amounted to:

• A)$600,000
• B)$605,000
• C)$1,020,000
• D)$1,025,000

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Definitions:

Short-Run

A period in which at least one factor of production is fixed, influencing how businesses can respond to changes in demand or supply.

Total Costs

The aggregate amount of all costs, both fixed and variable, incurred in producing goods or providing services.

Microwave Ovens

Electrical appliances that use microwave radiation to heat and cook food rapidly.

Average Variable Costs

The cost per unit of output that changes with the level of production, calculated by dividing the total variable costs by the quantity of output produced.