In the Circular Flow Diagram,the Value of All the Income

question 154

True/False

In the circular flow diagram,the value of all the income in the economy is greater than the value of goods and services produced in the economy.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a predetermined formula.

Machine-Hours

A measure of the time a machine is run during production, used to allocate manufacturing overhead costs based on machine usage.

Markup

A pricing strategy where a fixed amount or percentage is added to the cost of a product to determine its selling price.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to produced goods, based on estimated costs and activity levels.