-According to the Above Table, Which Assumes That Opportunity Costs

question 12

Multiple Choice

-According to the above table, which assumes that opportunity costs of producing goods X and Y are constant, the opportunity cost of producing one unit of Good X is ________ units of Good Y for Chen and ________ units of Good Y for Holly.

• A) 25; 100
• B) 0.5; 2.5
• C) 2; 0.4
• D) 100; 25

---

Definitions:

Standard Hours Per Unit

The amount of direct labor time that should be required to complete a single unit of product, including allowances for breaks, machine downtime, cleanup, rejects, and other normal inefficiencies.

Actual Total Variable Overhead Cost

The amount incurred in variable overhead expenses for actual production activities.

Standard Variable Overhead Rate

A predetermined rate used to allocate variable overhead costs to units of production, based on expected activity levels.

Practical Standards

Standards that allow for normal machine downtime and other work interruptions and that can be attained through reasonable, though highly efficient, efforts by the average worker.