A Partial Listing of Costs Incurred During December at Rooks

question 74

Multiple Choice

A partial listing of costs incurred during December at Rooks Corporation appears below: The total of the product costs listed above for December is:

• A)$340, 000
• B)$82, 000
• C)$647, 000
• D)$307, 000

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Definitions:

Variable Cost

Expenses that change in proportion to the level of production or sales activities of a company, such as raw materials and direct labor costs.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, typically represented by an area on a graph.

Supply Curve

A graph displaying the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to provide, holding all else equal.

Diminishing Marginal Product

A principle stating that as more of a variable input is added to a fixed input, the additional output produced from each additional unit of the variable input eventually decreases.