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If Some Income Earned by Households Is Not Spent on Output,or

question 52

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If some income earned by households is not spent on output,or if some income earned by firms is not spent on factor services,the circular flow of income will


Definitions:

Selling Price

The amount of money a customer pays for a particular product or service.

Unit Product Costs

The total cost associated with producing one unit of a product, including direct materials, direct labor, and overhead.

Markup

The amount added to the cost of goods to determine their selling price, typically expressed as a percentage of the cost.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated at the beginning of the period.

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