Income from Operations for Division M Is $150,000,and Income from Operations

question 3

Multiple Choice

Income from operations for Division M is $150,000,and income from operations before service department charges is $975,000.Therefore,:

• A)total operating expenses are $825,000.
• B)total manufacturing expenses are $825,000.
• C)direct materials,direct labor,and factory overhead total $825,000.
• D)total service department charges are $825,000.

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Definitions:

Rationing Mechanism

A system used to allocate scarce goods and services using criteria other than price.

Surplus

An excess of supply over demand, resulting in an accumulation of unsold products or unused resources.

Equilibrium Price

The cost at which the amount of a product or service that consumers want to buy matches the amount that producers are willing to sell, resulting in a balanced market situation.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific period.