Nature's Soap Manufactures Bar Soap and Liquid Soap

question 136

Multiple Choice

Nature's Soap manufactures Bar soap and Liquid soap.Of the following costs,which would be an indirect cost to the Liquid Department?

• A) Liquid manager's salary
• B) Manufacturing plant insurance
• C) Depreciation of the liquefying equipment
• D) Liquid Fragrance

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Definitions:

Short Run

A period during which at least one input, such as plant size or capital, is fixed and cannot be changed.

Maximum Profit

The highest possible financial gain achievable by a firm from its operations, after all costs have been subtracted from total revenue.

Output

The quantity of goods or services produced within a given time frame by a firm, industry, or country.

Long-Run Supply

The time period in which all factors of production and costs are variable, allowing firms to fully adjust to market conditions.