Suppose That Growth in Labor Is 5% While Output (Real

question 187

Multiple Choice

Suppose that growth in labor is 5% while output (real GDP) grew at a rate of 4%, it must be the case that:

• A) real GDP per capita increased by 20%.
• B) real GDP per capita increased.
• C) real GDP per capita stayed constant.
• D) real GDP per capita decreased.

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Definitions:

Raw Materials Inventory

The total cost of all components and materials that a company has in stock and that are to be used in the production process.

Manufacturing Overhead Applied

The allocation of estimated manufacturing overhead costs to individual units of production.

Raw Materials Used

The total cost of all raw materials that are converted into finished goods within a reporting period.

Job Order Cost System

An accounting system that assigns costs to specific production jobs or batches and is used in manufacturing businesses where each job is unique.