The Doctrine of the Natural Identity of Interests

question 16

Multiple Choice

The doctrine of the natural identity of interests:

• A)was first introduced by F. Y. Edgeworth.
• B)says that selfish behaviour can never improve society's welfare.
• C)is also known as the visible hand theory.
• D)was first proposed by Adam Smith in "The Wealth of Nations."

---

Definitions:

Predetermined Overhead Rate

is a rate used to allocate manufacturing overhead to products, calculated before the accounting period based on estimated costs.

Manufacturing Departments

Units within a manufacturing organization, each specializing in a different stage or aspect of the production process.

Machine-Hours

A measure of the amount of time a machine is operated, used as a basis for allocating manufacturing overhead costs in some costing systems.

Markup

The amount added to the cost price of goods to cover overhead and profit; it calculates the selling price.