Table 4-4 Table 4-4 Shows the Demand and Supply Schedules

question 101

Multiple Choice

Table 4-4
Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-4.If a minimum wage of $9.50 is mandated there will be a

• A)shortage of 10,000 units of labor.
• B)surplus of 10,000 units of labor.
• C)shortage of 20,000 units of labor.
• D)surplus of 20,000 units of labor.

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Definitions:

First-In, First-Out Method

An inventory valuation method where the items produced or purchased first are sold or used first.

Conversion Costs

The sum of labor and overhead costs necessary to convert raw materials into finished goods.

Direct Materials

Raw materials that are consumed in the manufacturing process and are directly incorporated into the finished product.

Weighted-Average Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.