Total Value Added in an Economy Is Equal to the Value

question 88

Multiple Choice

Total value added in an economy is equal to the value of

• A)all final goods produced.
• B)all final and intermediate goods produced.
• C)all inputs and outputs in the economy.
• D)all profits of all firms in the economy.
• E)the sum of the value of primary,intermediate and final goods.

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Definitions:

Volume Variance

The difference between the expected volume of sales or production and the actual volume, which affects budgeting and operational planning.

Fixed Manufacturing Overhead

Fixed manufacturing overhead refers to the costs associated with production that do not vary with the level of output, such as rent for factory buildings, salaries of certain staff, and equipment depreciation.

Overhead Volume Variance

The difference between the budgeted and actual volume of production, affecting the allocation of fixed overhead costs.

Denominator Level

In cost accounting, it refers to the base level of activity or volume used to calculate fixed costs per unit.