Which of the Following Is the Best Example of Intertemporal

question 35

Multiple Choice

Which of the following is the best example of intertemporal price discrimination?

• A)Awarding financial aid to offset college tuition fees
• B)Releasing movies on DVD six months after they are released in a theater
• C)Charging less for a second pizza after the consumer has paid the full price for the first pizza
• D)Charging people with health care insurance more for medical care relative to those without insurance

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Definitions:

Standard Cost System

A system of accounting that uses cost standards for costing materials, labor, and overhead.

Fixed Manufacturing Overhead Rate

This refers to the rate at which all fixed manufacturing costs are allocated across units produced, typically calculated at the beginning of a fiscal period.

Variances

The difference between planned or expected financial outcomes and the actual results.

Direct Materials

Raw materials that directly become a part of the finished product and can be easily traced to it.