Refer to the Following Figure

question 63

Multiple Choice

Refer to the following figure.The price of capital is $50 per unit: How many units of labor should the firm use in order to produce 400 units of output at the least cost?

• A)100
• B)105
• C)110
• D)115

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Definitions:

Ending Inventory

At the close of an accounting period, the value of products available for sale is calculated by taking the initial inventory, adding any purchases, and then deducting the cost of goods sold.

Cost Flow Assumption

An accounting method that determines the cost of goods sold and ending inventory valuation, examples include FIFO, LIFO, and weighted average.

LIFO

Last In, First Out, is an inventory valuation method assuming that goods purchased last are the first to be sold.

FIFO

First In, First Out, a method used in accounting to manage inventory and financial matters where the first items placed in inventory are the first sold or used.