When Resources Are Being Used Inefficiently, the

question 236

Multiple Choice

When resources are being used inefficiently, the

• A) economy is operating at a point outside its production possibility frontier.
• B) production possibility frontier shifts outward.
• C) economy is operating at a point inside its production possibility frontier.
• D) economy is operating at a point on the production possibility frontier.

---

Definitions:

Work in Process Inventory

The value of the materials, labor, and overhead costs of products that are in the production process but have not yet been completed.

Underapplied Overhead

A situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Direct Materials

Basic substances directly linked to the creation of a particular product.