If Pacific Power and Light Increased Its Rates by 10

question 182

Multiple Choice

If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be

• A) elastic.
• B) minimal.
• C) minor elasticity.
• D) variable.
• E) inelastic.

---

Definitions:

Overhead Applied

The amount of overhead costs allocated to products or job orders based on the predetermined overhead rate.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or projects based on their use of activities.

Overhead Assigned

The allocation of indirect costs or overhead to specific cost objects, such as products or jobs, based on a predetermined formula.

Traditional Costing

A cost accounting method that assigns manufacturing overhead costs to products based on volume-related measures.