Use the Figure Below to Answer the Following Question(s)

question 424

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 3-13

Refer to Figure 3-13. The market for margarine was initially in equilibrium at point e. Other things constant, an increase in the price of soybean oil, an important ingredient used to produce margarine, would likely move the equilibrium in this market toward point

• A) r.
• B) s.
• C) t.
• D) u.

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Definitions:

Full Costing Income (FCI)

A method of accounting in which all manufacturing costs, both fixed and variable, are assigned to produced units to calculate profitability.

Step-fixed Costs

Costs that remain constant for a certain level of production or activity, but can change to a different fixed amount when a certain threshold is crossed.

Variable Costs

Costs that vary directly with the level of production or output.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, labor, and both variable and fixed overhead—as part of the cost of a finished product.