Suppose That an Economy Produces 30,000 Units of Good a Which

question 49

Multiple Choice

Suppose that an economy produces 30,000 units of good A which sells at $3 a unit and 60,000 units of good B which sells at $2 per unit.Production of good A contributes

• A)1/2 times as much to GDP as the production of good B.
• B)3/2 times as much to GDP as the production of good B.
• C)3/4 times as much to GDP as the production of good B.
• D)4/3 times as much to GDP as production of good B.

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Definitions:

Overapplied Overhead

A situation where the allocated overhead cost in accounting records is more than the actual overhead cost incurred.

Underapplied Overhead

A situation where the allocated or applied overhead costs in the production process are less than the actual overhead costs incurred.

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to individual units of production, based on estimated or actual data.

Applied Manufacturing Overhead

The allocation of manufacturing overhead costs to individual units of production based on a formula or rate.