An Act of Production, as Economists Use the Term, Is

question 217

Multiple Choice

An act of production, as economists use the term, is demonstrated by which of the following?

• A) A worker places money in a pension fund.
• B) A local nonprofessional theater company performs a play.
• C) An individual buys municipal bonds to avoid taxes.
• D) A firm buys a pre-existing building in order to expand its operations.

Understand how to calculate budgeted cell conversion cost rates.

Identify internal failure costs from a schedule of activity costs.

Distinguish between value-added and non-value-added costs.

Recognize external failure costs from a schedule of activity costs.

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Definitions:

Long-Lived Assets

Assets with a useful life extending beyond one year, used in the operation of a business, such as equipment or buildings.

Allocated To Expense

A method of assigning or distributing costs among various accounts or periods as expenses.

Net Income

The net earnings of a business following the subtraction of all costs and taxes from the gross income.

Predictor

A statistical measure or model used to estimate future trends or outcomes based on historical data.