The Consumer Price Index for Planet Econ Consists of Only

question 146

Multiple Choice

The consumer price index for Planet Econ consists of only two items: books and hamburgers. In 2000, the base year, the typical consumer purchased 10 books for $25 each and 25 hamburgers for $2 each. In 2005, the typical consumer purchased 15 books for $30 each and 30 hamburgers for $3 each. The consumer price index for 2005 on Planet Econ equals:

• A) 1.00
• B) 1.15
• C) 1.25
• D) 1.45

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Definitions:

Overhead Applied

is the amount of manufacturing overhead cost allocated to each product or job, based on a predetermined overhead rate.

Machining Department

A section within a manufacturing facility where machining processes, such as cutting, shaping, and drilling, are carried out.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as maintenance, supervision, and utilities, excluding direct materials and direct labor.

Customizing Department

A specialized department within a company responsible for personalizing products according to customer specifications.