For Necessities, Income Elasticity Is Any Value

question 19

Multiple Choice

For necessities, income elasticity is any value:

• A) greater than 0.
• B) greater than 1.
• C) less than 0.
• D) between 0 and 1.

---

Definitions:

Direct Labor-Hours

The total hours worked by employees that are directly involved in the production process, serving as a measure for allocating labor costs to products or services.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products based on a certain activity base.

Plantwide Predetermined

A rate calculated by dividing the estimated manufacturing overhead cost by the estimated amount of a cost driver, applied uniformly across a manufacturing plant.

Manufacturing Overhead Rate

A calculation used in costing that allocates indirect manufacturing costs to products based on a predetermined factor, such as machine hours or labor costs.