What Can We Say About APC + APS and MPC

question 337

Multiple Choice

What can we say about APC + APS and MPC + MPS?

• A) Each must sum to 1.
• B) MPC + MPS = 100% of total income.
• C) APC + APS = 100% of the change in income.
• D) MPC + MPS always equals 1, but the sum of APC + APS can vary.

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Definitions:

Finished Goods Inventory

The assortment of goods that are marketed and ready but have not found buyers.

Labor Costs

The total monetary costs associated with the employment of labor, including wages, benefits, and taxes.

Job Order Costing System

An accounting system that accumulates costs by job, allowing for detailed tracking of the cost of materials, labor, and overhead on a per-job basis.

Direct Labor Costs

The total cost of all labor that can be directly attributed to the production of goods or services, including wages and salaries of the employees actually making the products.