Suppose Prices for New Homes Have Risen and Sales of New

question 145

Multiple Choice

Suppose prices for new homes have risen and sales of new homes have also risen. We can conclude that

• A) the demand for new homes has risen.
• B) the law of demand has been violated.
• C) new firms have entered the construction industry.
• D) construction firms must be facing higher costs.

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Definitions:

Standard Hours Allowed

The amount of work hours allocated to complete a specific task or project, often used in performance measurement.

Denominator Level

In cost accounting, it refers to the level of activity used to allocate fixed costs to units of production.

Standard Costing

Standard costing is an accounting method that applies estimated costs to product costs for budgeting purposes and performance evaluation, facilitating variance analysis.

Variable Overhead

Costs that fluctuate with production levels, such as utilities or materials used in the manufacturing process.