If Workers Are Paid $10, What Is the Labor Cost

question 153

Multiple Choice

$$\begin{array}{l}\begin{array} { | c | c | } \hline \text { Units of Labor } & \text { Units of Output } \\\hline 0 & 0 \\\hline 1 & 15 \\\hline 2 & 35 \\\hline 3 & 45 \\\hline 4 & 52 \\\hline\end{array}\\\text { Table 21.1 }\end{array}$$ If workers are paid $10, what is the labor cost per unit of output in Table 21.1 when output is increased from 15 to 35 units of output?

• A) $0.28 per unit.
• B) $0.50 per unit.
• C) $10 per unit.
• D) $20 per unit.

---

Definitions:

Allocate Prepaid Insurance

involves distributing the cost of insurance premiums over the period that the insurance coverage relates to, recognizing it as an expense over time rather than all at once.

Accrue Salaries Payable

Accrue Salaries Payable involves recording the salaries earned by employees that have not yet been paid, recognizing the liability before the cash is disbursed.

Closing Entry

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thus preparing the books for the next period.