Why Is National Defence Commonly Provided by the Government, While

question 89

Multiple Choice

Why is national defence commonly provided by the government, while food is NOT?

• A) Food manufacturers have successfully lobbied the government to stay out of the food industry.
• B) Food can easily be withheld from those who refuse to pay for it.
• C) Food provision is subject to a free-rider problem.
• D) Food is too essential to survival to be provided by a bureaucratic organization.

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Definitions:

Overapplied

Refers to the condition where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead cost.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, maintenance, and factory equipment depreciation.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold in a company, including the cost of the materials and labor directly used to create the product.

Job-order Costing

A costing method used for custom orders, where costs are assigned to specific job orders, distinguishing it from batch production.