A Decrease in Aggregate Supply in the Short Run Is

question 4

Multiple Choice

A decrease in aggregate supply in the short run is

• A)reflected in a movement to the left along the AS curve.
• B)reflected in a shift to the right in the AS curve.
• C)interpreted to mean that less total output will be supplied at any given price level.
• D)caused by a decrease in the price level.
• E)caused by an increase in the price level.

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Definitions:

Overapplied

Refers to a situation where the manufacturing overhead allocated to products is more than the actual manufacturing overhead incurred.

Underapplied

Describes a situation in cost accounting when the allocated manufacturing overhead costs are less than the actual overhead incurred, leading to a discrepancy that needs adjustment.

Job-Order Costing System

A costing system used to accumulate and assign costs to custom orders, projects, or jobs, typically in manufacturing or services.

Overapplied

When the overhead cost allocated to products exceeds the actual overhead costs incurred, requiring adjustment.