Figure 7-28 -Refer to Figure 7-28.At the Quantity Q2,the Marginal Value to Marginal

question 101

Multiple Choice

Figure 7-28
-Refer to Figure 7-28.At the quantity Q2,the marginal value to buyers

• A)and the marginal cost to sellers are both P2.
• B)is P2,and the marginal cost to sellers is P3.
• C)and the marginal cost to sellers are both P3.
• D)is P3,and the marginal cost to sellers is P2.

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Definitions:

Material Costs

Material Costs are the expenses incurred for the materials that are used in the production process of goods or services.

First-In, First-Out

An inventory valuation method which assumes that the first items purchased or manufactured are the first ones sold.

Work In Process

Items that are in the process of being produced but are not yet finished goods.

Direct Materials

Raw materials used directly in the production of a product, whose costs are easily traced to that product.