Good a and Good B Are Substitutes in Production

question 151

Multiple Choice

Good A and good B are substitutes in production. The demand for good A increases so that the price of good A rises. The increase in the price of good A shifts the

• A) supply curve of good B leftward.
• B) demand curve for good B leftward.
• C) supply curve of good B rightward.
• D) demand curve for good B rightward.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold before deduction of selling, general, and administrative expenses.

Job-Order Costing

A costing method that accumulates costs based on individual jobs or orders, suitable for businesses producing unique or custom products.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual jobs or products based on a consistent basis such as labor hours or machine hours.

Automated Jointer

A machine used in woodworking that automatically joints or planes the edges of wood stocks to prepare them for gluing or assembly.