Which of the Following Is an Example of Spending on Goods

question 61

Multiple Choice

Which of the following is an example of spending on goods and services in the circular flow model?

• A)Belinda purchases a new computer for her tax-preparation business.
• B)Javier buys 800 square feet of wood flooring for his vacation home.
• C)Celeste buys fresh herbs at the farmers' market to use in her restaurant.
• D)Timmy purchases a new examination table for use in his veterinary clinic.

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Definitions:

Direct Labor Hour

A unit of measure for the amount of time a worker spends on a specific task or project.

Factory Overhead

all indirect costs associated with the manufacturing process, excluding direct labor and direct materials.

Machine Hours

A measure of production time or activity based on the number of hours machines are used in the manufacturing process.

Overapplied Overhead

A situation where the actual manufacturing overhead costs are less than the overhead costs applied to production, resulting in a variance.