Use the Table Below to Determine the Marginal Propensity to Save

question 36

Multiple Choice

Use the table below to determine the marginal propensity to save (MPS) .

• A) 0
• B) 0.1
• C) 0.2
• D) 0.5
• E) 1.0

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Definitions:

Variable Overhead

The overhead costs that fluctuate with the level of production or business activity, such as utilities or materials consumed in production.

Direct Materials Purchases Variance

The difference between the actual costs of direct materials purchased and the expected (or standard) costs, impacting the budget and potentially financial results.

Variable Overhead Efficiency Variance

A measure used in management accounting to assess the efficiency of variable production overhead based on the actual time taken to produce goods versus the expected time.

Standard Direct Labor-Hours

Standard direct labor-hours refer to the estimated hours of direct labor work required to produce one unit of a product or service, used for budgeting and variance analysis.