Which Characterization Applies to a Normal Good

question 125

Multiple Choice

Which characterization applies to a normal good

• A)The average consumer chooses to consume the good at a normal level.
• B)The average consumer chooses to consume a normal good over a substitute good.
• C)An increase in income increases consumption of the good.
• D)An increase in income decreases consumption of the good.

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Definitions:

Standard Fixed Manufacturing Overhead Rate

The predetermined rate used to apply fixed manufacturing overhead to products, based on an estimate of total fixed manufacturing costs and an allocation basis.

Actual Fixed Overhead Costs

The real costs incurred for fixed overhead during a specified accounting period.

Budgeted Activity

The planned level of output or activity for a specific period, used for planning and control purposes.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected wage, multiplied by the actual hours worked.