Table 3-22 Assume That Zimbabwe and Portugal Can Switch Between Producing Toothbrushes

question 28

Multiple Choice

Table 3-22
Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.
-Refer to Table 3-22. Portugal has an absolute advantage in the production of

• A)toothbrushes and a comparative advantage in the production of toothbrushes.
• B)toothbrushes and a comparative advantage in the production of hairbrushes.
• C)hairbrushes and a comparative advantage in the production of toothbrushes.
• D)hairbrushes and a comparative advantage in the production of hairbrushes.

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Definitions:

Direct Materials

Direct materials are raw materials that can be directly attributable to the production process of a product and are a critical component of manufacturing costs.

FIFO Process Cost Method

An accounting method that assigns costs to inventory on the basis of the first-in, first-out principle, particularly useful in manufacturing.

Work in Process

Inventory that includes the materials, labor, and overhead costs for products that are in the production process but not yet completed.

Process Cost Report

A document in cost accounting that details the production costs for units processed during a period, including materials, labor, and overhead.