Refer to the Figure Below

question 125

Multiple Choice

Refer to the figure below. Suppose the solid line represents the current supply of Star Wars action figures. If the price of the plastic used to make action figures rises, current supply will:

• A) shift to S(B).
• B) not change because a change in the price of plastic will not affect the demand for action figures.
• C) shift to S(A).
• D) not change; only the quantity supplied will change.

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Definitions:

Direct Labor

The wages and salaries for the workers who are directly involved in the production of goods, easily traceable to the product.

Credit Sales

Sales made by a business where the payment is deferred, allowing the buyer to pay at a later date.

Production Budget

An estimation of the number of units that must be manufactured to meet the sales goals and the estimated costs involved.

Ending Inventory

The total value of all inventory, including raw materials, work-in-progress, and finished goods, at the end of an accounting period.