Economic Theory Is a Necessity, Not a Luxury

question 86

Multiple Choice

Economic theory is a necessity, not a luxury.This statement is true because theory

• A)always leads to practical and useful policy.
• B)can prevent depressions in the economy.
• C)substitutes for vast amounts of data.
• D)provides a structure for organizing and analyzing data.
• E)always leads to accurate predictions.

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to individual products or job orders, based on a formula that estimates the costs.

Machine-Hours

Machine-hours refer to the total time that machinery is operated within a specific period, used as a basis for allocating manufacturing overhead to products.

Variable Manufacturing Overhead

The part of manufacturing overhead expenses that directly fluctuates in relation to the volume of production.

Machine-Hours

A measurement of the amount of time a machine is operated, used as a basis for allocating machine-related costs to products.