Cindy Discovers That When She Goes to the Beach, She

question 11

Multiple Choice

Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers, or buy new batteries) . This is an example of:

• A) private property abuse.
• B) external costs.
• C) a negative externality.
• D) a positive externality.

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Definitions:

Work In Process

Inventory that is in the production process and is not yet complete; it includes raw materials, labor, and overhead costs incurred for products that are at various stages of production.

Direct Materials

Raw materials that are directly used in the production of a product and can be easily traced to the finished product.

Conversion Costs

Sum of labor costs and overhead expenses associated with the transformation of raw materials into finished goods.

First-In

Typically part of the phrase "First-In, First-Out" (FIFO), a method used to assign costs to inventory on the basis that the first items entered into inventory are the first sold.