Cost standards for one unit of product no. C77: Direct material 3 pounds at $2.50 per pound $ 7.50 Direct labor 5 hours at $7.50
1 answer:
Answer:
Standard hours for Job C77 39,000 HOURS
Explanation:
We are asked for Direct labours, so everything else is irrelevant for now.
In the first sentence we got the stadard values for 1 units of product:
Cost Standard DL 5 hours at $37.5 for 1 unit of product
Now let's check how many units were done on job C77
Job C77 Unit Produced 7,800 units
If each units standard is 5 hours, then multiplying we get the standard hours for job C77
Standard hours for the work:
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Answer: C. The ATC curve eventually slopes upward because average variable cost eventually increases
Explanation:
The Law of Diminishing Marginal Returns causes the Average Total Cost curve to eventually slope upwards because the Average Variable Cost will increase.
Why?
At first, with production increasing, a firm will be very efficient at producing a certain good thereby driving the cost down per unit. As time goes on however, the law of Diminishing Marginal Returns comes into play as more is invested into the business. The cost per unit will therefore rise which will lead to the ATC curve going upwards.
I have included a simple graph to illustrate.
If you need any clarification do react or comment.
