Use the Following to Answer Question

question 2

Multiple Choice

Use the following to answer question:
-(Table: The Total Utility of Income After College Expenses) Use Table: The Total Utility of Income After College Expenses.The Smith family has _____ marginal utility as income increases.The marginal utility of income between $32,500 and $35,000 is _____ utils per dollar,while it is _____ utils per dollar between $45,000 and $47,500.

• A)increasing;0.48;0.64
• B)increasing;0.12;0.36
• C)diminishing;0.28;0.08
• D)diminishing;0.40;0.10

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Definitions:

Relative Sales Value Method

A method used to allocate joint costs based on the relative sales value of the products produced from the same process or operation.

Allocated

The distribution of resources, costs, or expenses to specific departments, projects, or cost centers according to a predetermined method.

Constant Gross Margin Method

An inventory valuation method that maintains a fixed gross margin percentage for costing inventory despite changes in the cost of goods sold.

Joint Cost

The costs incurred in producing products up to a split-off point in a process that yields multiple products, typically allocated among the products based on some reasonable method.