To Avoid Trade Restrictions, a U

question 123

Multiple Choice

To avoid trade restrictions, a U.S. firm moves its final production process to Ireland and then ships the final products to Germany. This is an example of

• A) trade deflection.
• B) trade diversion.
• C) protectionism.
• D) rules of origin.

---

Definitions:

Overapplied Manufacturing Overhead

Occurs when the allocated amount for manufacturing overhead costs exceeds the actual overhead costs incurred.

Raw Materials

Raw materials are the basic, unprocessed inputs used in the manufacturing of goods, including items like minerals, chemicals, or agricultural products essential for production processes.

Factory Overhead Applied

The allocation of all indirect costs of manufacturing to the actual production, aiding in the determination of the total cost of production.

Predetermined Factory Overhead Rate

The rate used to apply factory overhead costs to the goods manufactured. The rate is determined by dividing the budgeted overhead cost by the estimated activity usage at the beginning of the fiscal period.