Consumption Expenditures

question 3

Multiple Choice

Consumption expenditures

• A)Account for approximately two-thirds of total spending.
• B)Include purchases of new and used goods by consumers.
• C)Are equal to disposable personal income plus personal saving.
• D)Are equal to consumer spending plus transfer payments.

---

Definitions:

Direct Labor Cost

The expense incurred by a company to pay workers who are directly involved in the production of goods or services.

Cost of Goods Manufactured

The total production cost incurred by a company to manufacture products in a specific period, including materials, labor, and overhead costs.

Underapplied Manufacturing Overhead

The situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Overapplied Manufacturing Overhead

Occurs when the allocated manufacturing overhead costs are more than the actual overhead expenses incurred.