Cost-Push Inflation Arises From

question 94

Multiple Choice

Cost-push inflation arises from:

• A)a decrease in aggregate demand.
• B)a decrease in aggregate supply.
• C)an increase in aggregate demand.
• D)an increase in aggregate supply.

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products or services based on the activities they require, aiming for more accurate costing.

Overhead Rate

A calculation used to allocate overhead costs to produced goods or services, typically based on a specific activity base such as labor hours or machine hours.

Predetermined Overhead Rate

A rate calculated at the beginning of the period by dividing estimated total overhead costs by an estimated allocation base, used to apply overhead costs to products or services.

Unused Capacity

The portion of a company's production potential that is not being utilized to manufacture goods or provide services.