In the Simple Circular Flow Model

question 1

Multiple Choice

In the simple circular flow model:

• A)households are demanders of factors of production.
• B)businesses are suppliers of final products.
• C)households are suppliers of final products.
• D)there are real flows of goods, services, and factors, but not money flows.

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Definitions:

Weighted-Average Method

An inventory costing method that averages the cost of all similar goods available during a period to determine the value of inventory.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, representing the costs necessary to convert raw materials into finished goods.

Weighted-Average Method

An inventory costing method that calculates cost of goods sold and ending inventory based on the average cost of all goods available for sale.

Cost Per Equivalent Unit

A calculation used in process costing to allocate costs to partially completed units, considering them as fractions of whole units.