Table 11-12

question 153

Multiple Choice

Table 11-12. Will's expenditures on food for three consecutive years, along with other values, are presented in the table below.
-Refer to Table 11-12. Suppose Will's 2009 food expenditures in 2011 dollars amounted to $5,670. Suppose also that the real interest rate in 2011 was 3 percent. Then, in 2011,

• A)the inflation rate was 8 percent and the nominal interest rate was 5 percent.
• B)the inflation rate was 9 percent and the nominal interest rate was 6 percent.
• C)the inflation rate was 8 percent and the nominal interest rate was 11 percent.
• D)the inflation rate was 9 percent and the nominal interest rate was 12 percent.

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Definitions:

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed goods, calculated by taking the number of partially completed units and converting them into a number of equivalent fully completed units.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, incurred to convert raw materials into finished goods.

Total Manufacturing Costs

This encompasses all the direct materials, direct labor, and factory overhead costs involved in producing goods.

Units Transferred Out

In cost accounting, it refers to the number of units moved from one production process to the next or to the finished goods inventory.