Figure 9-4 -Refer to Figure 9-4.The Horizontal Line at the World Price

question 64

Multiple Choice

Figure 9-4

-Refer to Figure 9-4.The horizontal line at the world price of wagons represents the

• A)demand for wagons from the rest of the world.
• B)supply of wagons from the rest of the world.
• C)level of inefficiency in the domestic market caused by trade.
• D)surplus in the domestic wagon market.

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Definitions:

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production of goods.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs and activities.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that vary with the level of production, such as utilities and materials.

Direct Labor-Hours

The cumulative hours employees spend directly participating in the manufacturing process.