NAME: JOHN VACKY B. BANTUGAN DATE: FEB.

21, 2022

COURSE: BS ACCOUNTANCY CODE: BE313 -6263

2ND EXAMINATION

PART 1- ESSAY

1. There are 3 stages of production. As you can see in the

graph that I make, the first stage of a company’s production is
the most rapidly growing. In stage 2, as you observed in the
graph, the total product are still rising while the marginal and
average are starting to decrease. In stage 3, the total
product is starting to decrease, the average product curve
continues to drop, and the marginal product curve becomes
negative. This could be attributed to factors like labor
capacity and efficiency.

2. According to law of diminishing marginal utility, as a consumer consumes more and

more goods, the addition to total utility obtained diminished. Marginal utility eventually
becomes zero and then negative. In the other hand, the law of diminishing marginal
returns states that if a company keeps increasing an input while keeping all other inputs
and technology constant, the resulting increase in output will eventually become
smaller.

3. A cost is an expenses incurred by a company during the manufacturing process of its

goods. When a company manufactures goods, it incurs two types of costs, the variable
and fixed costs. The variable cost is expenses that vary according to how much a
business produces and sells. Raw materials, utility expenses, labor, and commissions
are all examples of variable costs. In the other hand, fixed cost is expenses that remain
constant regardless of how much the business produces. Example of this are rent,
depreciation insurance, and property tax.