At the Point Where the Supply Curve Crosses the Demand

question 163

Multiple Choice

At the point where the supply curve crosses the demand curve on a graph

• A) no profits will be made.
• B) all products offered for sale will be sold.
• C) a shortage will result if the price is too low.
• D) no sales will be made.
• E) a surplus will result if the price is too low.

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Definitions:

Denominator Activity

relates to the level of activity used to allocate fixed overhead costs to units produced, which can affect the unit cost of production.

Standard Hours

The predetermined amount of time expected to complete a task or job under normal conditions.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or cost objects, calculated in advance based on estimated costs and activity levels.

Direct Labour Hours

The total number of hours worked by employees directly involved in the manufacturing process or providing a service.