Cold Weather in the Prairie Provinces Increases the Popularity of Vacations

question 142

Multiple Choice

Cold weather in the Prairie Provinces increases the popularity of vacations in sunny California. At the same time, the hotel employees' union in California negotiates a significant pay increase for its members. What is the likely impact on the hotel market in California?

• A) an increase in the price of hotel rooms, but an uncertain effect on the quantity of hotel rooms rented
• B) an increase in the price of hotel rooms and a decrease in hotel room rentals
• C) an uncertain effect on the price of hotel rooms, but an increase in the quantity of hotel rooms rented
• D) an increase in the price of hotel rooms and an increase in hotel room rentals

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Definitions:

Job-Order Costing

A cost accounting system that accumulates costs by specific jobs or orders, suitable for companies producing unique products or services.

T-Accounts

A graphical representation used in accounting to depict accounts, showing debits on the left and credits on the right.

Direct Materials Cost

The expense associated with raw materials and components directly involved in producing a product.

Raw Materials

The fundamental elements and parts employed during manufacturing to create final products.