Which of the Following Is an Example of Direct Materials

question 47

Multiple Choice

Which of the following is an example of direct materials cost for an automobile manufacturer?

• A)cost of wages of assembly workers
• B)cost of oil or lubricants for the factory machinery
• C)cost of the automobile windshield
• D)salary of the production supervisor

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Definitions:

Pigouvian Tax

A tax imposed on any market activity that generates negative externalities (costs not reflected in the market price) with the aim of correcting the market outcome.

Cost Function

A mathematical relation that describes how production costs change with variations in the level of output.

Competitive Price

A pricing strategy that aims to attract customers by setting product prices similar or lower than rivals in the market.

Tragedy Of The Commons

A situation in which individuals, acting independently and rationally according to their own self-interest, behave contrary to the best interests of the whole by depleting or spoiling shared resources.