Which of the Following Statements Is True

question 119

Multiple Choice

Which of the following statements is true?

• A)Absolute advantage implies comparative advantage.
• B)Comparative advantage does not require absolute advantage.
• C)Absolute advantage requires comparative advantage.
• D)Comparative advantage requires absolute advantage.

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Definitions:

Period Expense

Costs that are not directly related to production and are charged as expenses in the period they occur.

Predetermined Overhead Rate

A rate calculated by dividing estimated overhead costs by an estimated activity base, used to allocate overhead costs to products or services.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries, and equipment depreciation within a manufacturing plant.

Manufacturing Overhead

All costs tied to production that are not direct materials or direct labor.