Which of the Following Is the Basic Equation Underlying Aggregate

question 104

Multiple Choice

Which of the following is the basic equation underlying aggregate expenditures?

• A)MV = PQ
• B)AS = AD
• C)Saving = Income − Consumption
• D)Ca + Ig + Xn + G = GDP

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Definitions:

Unadjusted Cost of Goods Sold

The initial calculation of the cost of goods sold that has not been modified for returns, allowances, or discounts.

Overapplied Manufacturing Overhead

A scenario where the allocated manufacturing overhead costs exceed the actual overhead costs incurred, resulting in a credit balance.

Predetermined Overhead Rate

This is a rate used to allocate manufacturing overhead costs to individual units of production, based on a certain activity, such as labor hours or machine hours.

Direct Materials

Substances that can be directly linked to the manufacturing of a particular item.