The 2007 Farm Act Was Set to Expire in 2012

question 96

Multiple Choice

The 2007 Farm Act was set to expire in 2012 for all of the following reasons except

• A) Farm subsidies are received in 362 of the 435 congressional districts.
• B) The economic reasons for subsidies were challenged.
• C) The high federal budget deficit called for cuts in farm subsidies.
• D) "Millionaire" farmers were criticized for receiving government supports.

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Definitions:

Cost-Volume-Profit Chart

A graphical representation that shows the relationship between a company's costs, sales volume, and profits.

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, a measure of how revenue growth translates into growth in operating income.

Variable Costing

A managerial accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, treating fixed manufacturing overhead as an expense of the period.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.