Figure 3-13 Peru's Production Possibilities Frontier

question 13

Multiple Choice

Figure 3-13
Peru's Production Possibilities Frontier
-Refer to Figure 3-13.Suppose Peru decides to increase its production of emeralds by 2.What is the opportunity cost of this decision?

• A)30 rubies
• B)40 rubies
• C)60 rubies
• D)120 rubies

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Definitions:

Raw Material Price

This refers to the cost of basic materials that are used in the production of goods.

FOH Budget Variance

The difference between the budgeted factory overhead costs and the actual overhead costs incurred.

FOH Volume Variance

The difference between the budgeted fixed overhead and the applied amount based on the actual activity level.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, including rent, depreciation, and salaries of certain employees in a manufacturing facility.