Given the Information in the Table Above, If the Home

question 7

Multiple Choice

Given the information in the table above, if the Home economy suffered a meltdown, and the Unit Labor Requirements doubled to 20 for cloth and 40 for widgets then home should

• A) export cloth.
• B) export widgets.
• C) export both and import nothing.
• D) export and import nothing.
• E) export widgets and import cloth.

---

Definitions:

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate overhead costs to products or job orders based on a chosen activity base.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods or provision of services.

Manufacturing Overhead

Any production expenses beyond direct labor and materials, which include overheads like equipment wear and tear, utilities, and rental fees.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, maintenance, and salaries of managers.