Refer to the Diagram

question 130

Multiple Choice

Refer to the diagram. Consumption equals disposable income when

• A) disposable income is B.
• B) disposable income is D.
• C) CD equals A.
• D) B equals CD.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of specific goods.

Assembly Department

A section of a manufacturing facility where components are put together to form a finished product.

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, not directly attributable to a specific product.

Weighted-Average Cost Method

An inventory costing method that assigns a weighted average cost to each unit of inventory on hand.