It must be debatable. Hope this helps
Answer: d. Liza faces economies of scale; Sam faces diseconomies of scale; Tina faces constant returns to scale
Explanation:
Economies of scale occurs when the increase in production by companies brings about a reduction in cost. Diseconomies of scale is when a rise in production leads to an increase in cost as well. For a constant return to scale, the cost remains the same.
Therefore, the answer will be option D "Liza faces economies of scale; Sam faces diseconomies of scale; Tina faces constant returns to scale".
Answer:
Total overhead for O6 697,933
Explanation:
First, we solve for the activity rates:
![\left[\begin{array}{ccccc}$Activity&$Driver&$cost pool&$Total base&$Rate\\Processing&MHS&51000&16240&3.14\\Supervising&batches&31600&1230&25.69\\\end{array}\right]](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7Bccccc%7D%24Activity%26%24Driver%26%24cost%20pool%26%24Total%20base%26%24Rate%5C%5CProcessing%26MHS%2651000%2616240%263.14%5C%5CSupervising%26batches%2631600%261230%2625.69%5C%5C%5Cend%7Barray%7D%5Cright%5D)
Then, we apply this rate to the Product O6 base cost driver values
![\left[\begin{array}{ccccc}Activity&base&Allocate O6\\Processing&15600&48984\\Supervising&810&20,809\\Total&&69,7933\\\end{array}\right]](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7Bccccc%7DActivity%26base%26Allocate%20O6%5C%5CProcessing%2615600%2648984%5C%5CSupervising%26810%2620%2C809%5C%5CTotal%26%2669%2C7933%5C%5C%5Cend%7Barray%7D%5Cright%5D)
