The Difference Between Nominal and Real Is

question 89

Multiple Choice

The difference between nominal and real is

• A)nominal is measured in current dollars and real is measured in dollars of a given year.
• B)nominal is a number stated in dollars and real is stated with an index number.
• C)real is measured in current dollars and nominal is measured in dollars of a given year.
• D)real is a number stated in dollars and nominal is stated with an index number.
• E)both nominal and real are measured with index numbers, only the nominal index is greater than 100 and the real index is less than 100.

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Definitions:

Predetermined Overhead Rate

An estimated overhead rate used to apply manufacturing overhead costs to products, calculated before the costs are actually incurred.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as utilities, rent for the manufacturing facility, and salaries for management, distinct from direct labor and direct materials.

Job-Order Costing

An accounting method used to track the costs associated with producing a specific batch of products or providing a particular service, allocating costs to each job individually.

Raw Materials

Basic materials or substances used in the initial stages of manufacturing or production.