For a College Student Who Wishes to Calculate the True

question 176

Multiple Choice

For a college student who wishes to calculate the true costs of going to college, the costs of room and board

• A) should be counted in full, regardless of the costs of eating and sleeping elsewhere.
• B) should be counted only to the extent that they are more expensive at college than elsewhere.
• C) usually exceed the opportunity cost of going to college.
• D) plus the cost of tuition, equals the opportunity cost of going to college.

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Definitions:

Direct Labor-Hours

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

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products based on a predetermined activity base.

Machine-Hours

A measure of the amount of time machines are operated in the production of goods or services, used as a basis for allocating manufacturing costs.

Manufacturing Overhead

The indirect costs related to manufacturing, not including direct labor or materials, such as utility costs and maintenance expenses.