Use the Following to Answer Questions

question 25

Multiple Choice

Use the following to answer questions:
-(Table: Value of the Marginal Product of Labor and Demand) In the figure Value of the Marginal Product of Labor and Demand, the total product of labor is shown for the hourly production of power cords. Assume that the market for power cords is perfectly competitive. If the price of a power cord is $2 and the market wage rate is $20 per hour, the profit-maximizing quantity of labor is _____ workers.

• A) two
• B) four
• C) six
• D) eight

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Definitions:

Work In Process Inventory

Goods that are in the process of being manufactured but are not yet complete.

Fixed Overhead Costs

Regular, unchanged costs incurred by a business, regardless of its level of production or activity, such as rent and salaries.

Control Perspective

An approach focusing on the monitoring and adjusting of processes and strategies to achieve desired outcomes or objectives.

Revenue Variance

The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.