Exhibit 1-6 -Refer to the Production Possibilities Schedule in Exhibit 1-6.A Combination

question 4

Multiple Choice

Exhibit 1-6
-Refer to the production possibilities schedule in Exhibit 1-6.A combination of 40 units of computers and 4 television sets

• A)cannot be produced with the current supply of resources.
• B)is possible only with full and efficient use of all resources.
• C)has never been and never will be produced.
• D)illustrates underemployment of resources.
• E)will not satisfy the consumers' demands.

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Definitions:

Direct Labor-Hours

The number of labor hours spent by employees directly working on the production of goods or services.

Casting

A manufacturing process where a liquid material is poured into a mold, which contains a hollow cavity of the desired shape, and then allowed to solidify.

Assembly

The phase in manufacturing where components are put together to form a final product.

Predetermined Overhead Rates

Rates used to allocate manufacturing overhead costs to products or job orders, calculated based on estimated costs and activity levels.