Exhibit 30-2 ​

question 42

Multiple Choice

Exhibit 30-2
​

-Refer to Exhibit 30-2. If the exhibit represents a positive externality situation, the private cost of expanding output from Q₁ to Q₂ is the area of

• A)Q₁ABQ₂.
• B)Q₁AEQ₂.
• C)Q₁CBQ₂.
• D)ABE.

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Definitions:

Master Budget

An all-encompassing financial planning document that consolidates all of an organization's budgets for sales, production, overhead, and cash flow.

Materials Budget

An estimate of the cost of raw materials required for production over a specific period.

Budgeted Production

An estimate of the number of units that must be produced during a specific period to meet expected sales and inventory levels.

Material Costs

The costs associated with the raw materials and components used in creating a product.