If the Cost of a Market Basket Is $150 in 2004

question 33

Multiple Choice

If the cost of a market basket is $150 in 2004 and $200 in 2005, the price index for 2004 using 2005 as the base year is _____.

• A) 0.75
• B) 1.00
• C) 1.33
• D) 1.50

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Definitions:

Traceable Fixed Costs

Costs that can be directly associated with a specific product, service, or department without any ambiguity.

Rubber Division

A business segment or department within a company that is responsible for the production and/or sales of rubber products.

Common Corporate Fixed Costs

Expenses incurred by a corporation that do not vary with the level of production or sales, and are shared across different segments or products of the company.

Contribution Margin

The difference between sales revenue and variable costs, which contributes to covering fixed costs and generating profit.