-If the Economy Was Producing at Point X and Moved

question 206

Multiple Choice

-If the economy was producing at point X and moved to point Y,

• A)it would have moved from where the economy operates most of the time to a severe recession.
• B)it would have moved from where the economy operates most of the time to a depression.
• C)the unemployment rate would increase.
• D)it would have moved from where the economy operates most of the time to a severe recession AND the unemployment rate would increase.
• E)it would have moved from where the economy operates most of the time to a depression AND the unemployment rate would increase.

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Definitions:

Underapplied

A situation where the allocated costs of production are less than the actual costs incurred, leading to a discrepancy in accounting records.

Overapplied

A situation where the allocated manufacturing overhead costs exceed the actual manufacturing overhead costs incurred.

Denominator Activity

The total base activity used to allocate overhead costs in cost accounting, such as total direct labor hours or machine hours available.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used in allocating manufacturing overhead.