The Bowden Corporation Makes a Single Product

question 8

Multiple Choice

The Bowden Corporation makes a single product. Only one kind of direct material is used to make this product. The company uses a standard cost system. The company's cost records for June show the following data:
There were no beginning inventories of direct materials.
-The standard cost of direct material for one unit of output is:

• A) $2 per unit
• B) $16 per unit
• C) $8 per unit
• D) $10 per unit

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Definitions:

Legal Markets

Markets operating within the framework of regulatory laws and norms, where transactions of goods and services occur legally.

Supply and Demand

The fundamental economic model that describes the interaction between the availability of a particular product and the desire for that product, determining its price.

Deadweight Loss

A loss of economic efficiency that occurs when the optimal level of supply and demand is not achieved.

Supply Elasticities

Measures the responsiveness of the quantity supplied of a good to a change in its price.