Use the Following to Answer Questions

question 166

Multiple Choice

Use the following to answer questions .
Exhibit: Economic Adjustments
-(Exhibit: Economic Adjustments) If the economy is at point a,

• A) employment is greater than the natural level of employment.
• B) it is at the natural level of employment.
• C) it is in a recessionary gap.
• D) the unemployment rate is negative.

---

Definitions:

Standard Cost System

An accounting system that assigns predetermined costs to products and services, which are then compared to actual costs for variance analysis.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant portion of production costs.

Raw Materials Inventory

The stock of basic materials that are used in production but have not yet been processed.

Standard Costs

Predetermined or budgeted costs for materials, labor, and overhead, used as benchmarks to measure actual performance and manage costs.