A Firm Produces and Sells Two Products, Plus and Max

question 175

Multiple Choice

A firm produces and sells two products, Plus and Max. The following information is available relating to setup costs (a part of factory overhead) : Using number of setups as the activity base, the amount of setup cost allocated to each unit of product for Plus and Max, respectively is:

• A) $21.60; $.54.
• B) $54.00; $27.00.
• C) $60.00; $60.00.
• D) $108.00; $2.70.
• E) $200.00; $16,000.00

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Definitions:

Investment

The allocation of resources, usually financial, in expectation of generating an income or profit in the future.

Money Supply

The overall financial resources quantity in an economy at a specified time.

Interest Rate

The percentage of a sum of money charged by a lender to a borrower for the use of money, typically expressed as an annual percentage.

Quantity of Money Demanded

The total amount of money that households and businesses in an economy want to hold at a given time, based on interest rates and economic activity.