Figure 3-8 -Refer to Figure 3-8.The Graph in This Figure Illustrates an Figure

question 372

Multiple Choice

Figure 3-8
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S1 (point C) .If the price of motorcycle side cars (a complement to motorcycles) decreases,and the wages of motorcycle workers increase,how will the equilibrium point change?

• A)The equilibrium point will move from C to E.
• B)The equilibrium point will move from C to B.
• C)The equilibrium point will move from C to A.
• D)The equilibrium will first move from C to A,then return to C.

---

Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing a product, such as utilities, maintenance, and factory management salaries.

T-Accounts

Diagrammatic representations used in accounting to visualize debits and credits for individual accounts.

Direct Labor-Hours

A measure of the total hours of work directly involved in manufacturing goods or providing services.

Predetermined Overhead Rate

This is a calculated figure used to allocate manufacturing overhead costs to products based on a relevant activity such as machine hours or labor hours, set before the accounting period starts.