Discrimination Is an Example of a Rationing Mechanism That May

question 5

True/False

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

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Definitions:

Machine Hours

A measure of the total running time of machinery used in production over a specific period, often used to allocate costs based on machine usage.

Job Cost Sheets

Documents that track the materials, labor, and manufacturing overhead costs incurred for a specific job in a cost accounting system.

Job Order Costing

An accounting method used to track the costs associated with producing a specific batch of products or performing a specific job.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a selected cost driver.