Figure: Earned Consumer Surplus Refer to the Figure

question 67

Multiple Choice

Figure: Earned Consumer Surplus Refer to the figure. The market price of the product is $20 per unit. Calculate the dollar amount of consumer surplus being earned in this market.

• A) $120,000
• B) $60,000
• C) $100,000
• D) $80,000

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products by estimating overhead costs in advance.

Automated Manufacturing

The use of computer-controlled machinery and robotics in the production process to increase efficiency and reduce human error.

Activity Base

A measure used to assign costs to cost objects based on their use of activities, often used in activity-based costing.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.