If the Income Elasticity of Demand for Some Good Is

question 23

Multiple Choice

If the income elasticity of demand for some good is 2.4,a 10% increase in income results in

• A)a 24% increase in the quantity demanded.
• B)a 240% increase in the quantity demanded.
• C)a 24% decrease in quantity demanded.
• D)a 2.4% increase in the quantity demanded.
• E)a 240% decrease in quantity demanded.

Understand the components and calculation of the cost of goods sold.

Comprehend how overapplied or underapplied manufacturing overhead affects financial statements.

Recognize the accounting treatment for raw materials and manufacturing overhead.

Identify the correct journal entries for the movement of materials and the transfer of costs in the production process.

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Definitions:

Consignor

The Consignor is the person or entity who owns goods that are sent to another party, known as the consignee, to sell on their behalf.

Consignee

The individual or entity to whom goods are shipped to be sold on behalf of the consignor, who retains ownership until the goods are sold.

FIFO

An inventory valuation method that assumes that the first items placed into inventory are the first sold.

Purchase Costs

The total expense incurred to acquire goods or services, including the product price and additional charges related to acquisition.