The First Unit of Production Takes 20 Hours to Produce

question 187

Multiple Choice

The first unit of production takes 20 hours to produce and the learning rate is expected to be 90 percent. How long will it take to produce the fourth unit?

• A) less than or equal to 12.0 hours
• B) greater than 12.0 hours but less than or equal to 15.0 hours
• C) greater than 15.0 but less than or equal to 18.0 hours
• D) greater than 18.0 hours

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Definitions:

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period they are incurred.

Individual Sales

Individual Sales refer to transactions and revenue generated from selling products or services on a per-unit or single-transaction basis.

Matching Principle

An accounting principle that requires expenses to be matched with the revenues they help to generate in the same accounting period.

Expenses

Costs incurred during the operation of a business, such as rent, salaries, and utilities, required for generating revenue.