Trent Decides to Spend an Hour Playing Basketball Rather Than

question 38

Multiple Choice

Trent decides to spend an hour playing basketball rather than studying.His opportunity cost is:

• A) nothing because he enjoys playing basketball more than studying.
• B) the benefit to his grades from studying for an hour.
• C) the increase in skill he obtains from playing basketball for that hour.
• D) nothing because he had a free pass into the sports complex to play basketball.

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Definitions:

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain relatively constant regardless of the level of production, such as rent, insurance, and salaries of permanent staff.

Direct Labor

Labor costs directly attributable to the production of specific goods or services within a company.

Work in Process

Inventory that has begun the manufacturing process but is not yet completed, a state between raw materials and finished goods.

Direct Labor

Workers who are directly involved in the manufacturing of products or provision of services, whose wages are directly tied to the production process.