If the Consumption Function Is Defined as C = 7,250

question 86

Multiple Choice

If the consumption function is defined as C = 7,250 + 0.8Y,what is the value of the multiplier?

• A)0.2
• B)0.8
• C)1.25
• D)5

---

Definitions:

Overhead Assigned

The process of allocating manufacturing overhead costs to specific products or cost objects based on a predetermined rate or method.

Overhead Applied

The assigning of overhead costs to goods produced based on a predetermined rate or basis such as machine hours or labor hours.

Activity-Based Costing

An accounting technique that tags and apportions the costs of organizational activities to every product and service in line with their real consumption.

Activity Rate

The predetermined rate used to allocate overhead costs to products or services based on a specific activity measure, such as machine-hours or labor-hours.