Consider the Following Statement: "Canadians on Average Are Worse Off

question 68

Multiple Choice

Consider the following statement: "Canadians on average are worse off when some manufacturing jobs migrate from Canada to low- wage countries in Central America." This statement is because _ .

• A)incorrect; the permanent gains to consumers from lower prices outweigh the temporary losses to the displaced manufacturing workers
• B)incorrect; low- wage countries do not produce manufactured goods
• C)correct; Canadian firms cannot compete with production in low- wage countries
• D)incorrect; there are no Canadians made worse off by such an event
• E)correct; the loss of manufacturing jobs leads to permanent income losses in Canada

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual variable overhead based on hours worked and the standard cost of variable overhead for those hours.

Standard Variable Overhead Rate

The predetermined rate at which variable overhead costs are applied to production activities, based on an expected level of activity.

Actual Total Variable Overhead Cost

The actual incurred costs that vary with production volume, such as raw materials and direct labor.

Labour Efficiency Variance

The difference between the actual labor hours worked and the standard labor hours set for the level of production achieved.