Question

For a factory that produces wooden chairs, the lumber it buys is (check all that apply)

Group of answer choices

a. a fixed cost

b. a cost of production

c. a variable cost

d. a cost that could be variable or fixed

e. an input

f. a factor of production

g. measured in quantity output

Answer 1

Lumber for a factory producing wooden chairs is a cost of production, a variable cost, an input, and a factor of production, and it is measured based on the quantity of output.

Step-by-step explanation:

For a factory that produces wooden chairs, the lumber it buys would be categorized as follows:

• (b) a cost of production - as it is one of the expenses necessary to create the product,
• (c) a variable cost - because the amount of lumber needed varies with the number of chairs produced,
• (e) an input - referring to the raw materials used in production,
• (f) a factor of production - as it is an essential component required to produce a good,
• (g) measured in quantity output - because you calculate it based on the volume of chairs produced.

Lumber is not a fixed cost as it is not a cost that remains constant regardless of production levels. It varies based on how much product (chairs) is made. Also, while a cost could potentially be variable or fixed (d), in the specific context of a chair factory, lumber as a material used directly in the creation of a product is variable.