A Long Line at the Campus Bookstore at the Beginning

question 179

Multiple Choice

A long line at the campus bookstore at the beginning of the term is an example of

• A) price rationing.
• B) an ineffective price ceiling.
• C) a non-price rationing device.
• D) an ineffective price floor.

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Definitions:

Inflationary Price Increase

A rise in prices across the board that is often attributed to an increase in the money supply or demand outpacing supply.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Variable Costs

Additional costs incurred when unit production increases. Variable costs per unit usually are assumed not to vary with volume.

Inventory Costing Method

A system used to value inventory, often involving methods such as First-In, First-Out (FIFO) or Last-In, First-Out (LIFO).