The Consumer Price Index CPI)

question 194

Multiple Choice

The consumer price index CPI)

• A) measures the increase in the prices of the goods included in GDP.
• B) is the ratio of the average price of a typical basket of goods to the cost of producing those goods.
• C) compares the cost in the current period to the cost in a reference base period of a basket of goods typically consumed in the base period.
• D) compares the cost of the typical basket of goods consumed in period 1 to the cost of a basket of goods typically consumed in period 2.

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Definitions:

Standard Cost Variances

The differences between actual costs and standard costs in manufacturing, divided into categories such as materials, labor, and overhead.

Administrative Expenses

Overhead or general expenses related to the day-to-day operations of a business that are not directly tied to a specific project.

Fixed Manufacturing Overhead

The consistent, non-variable costs associated with manufacturing products, such as salaries and rent for factory premises.

Direct Labor Costs

Costs that are directly associated with the production of goods, such as wages paid to manufacturing staff.