A Nation with Cheap, Efficient Communications Is Likely to Be

question 145

Multiple Choice

A nation with cheap, efficient communications is likely to be

• A) richer, ceteris paribus, because transaction costs will be lower and trade greater.
• B) richer only if production of goods is cheaper, too, since trade itself cannot create value.
• C) poorer since it spends so much on communication instead of true productivity.
• D) spending too much on communications, which adds nothing to the value of output.

Understand the concept of departmentalized overhead rates and their application.

Calculate the unit product cost for jobs.

Analyze the impact of actual manufacturing overhead costs on applied rates and prices.

Understand the differences between plantwide and departmental overhead rates.

---

Definitions:

Actual Overhead

Actual overhead refers to the real costs incurred for overhead expenses, such as utilities, rent, and administrative costs, during a given period.

Direct Materials Price

The cost per unit of raw materials that are directly traceable to the production of goods.

Direct Labor Rate Variances

The difference between the actual cost of direct labor and the expected (or standard) cost, used in variance analysis to monitor labor costs.

Budgeted Standards

Budgeted standards represent targeted financial goals or benchmarks that a company aims to achieve within a certain period, often used in performance assessment and planning.