Consumer Surplus Is

question 378

Multiple Choice

Consumer surplus is

• A) the total difference between the total amount that consumers actually pay for an item and the total amount that they would have been willing to pay.
• B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item.
• C) the total difference between the total amount that consumers would have been willing to pay for an item and the total amount that they actually pay.
• D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.

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Definitions:

Job-Order Costing

A cost accounting system that accumulates manufacturing costs separately for each job or order, suitable for industries producing customized products.

Overapplied Overhead

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

Underapplied Overhead

The amount by which the actual manufacturing overhead cost exceeds the applied overhead cost.

Job-Order Costing

Job-order costing is a costing method used to determine the cost of manufacturing each custom-made product or job, particularly effective for individual or special products.