When a Society Takes Increasing Amounts of Resources and Applies

question 351

Multiple Choice

When a society takes increasing amounts of resources and applies them to the production of a specific good, resulting in increasing opportunity costs for each additional unit produced, which of the following applies?

• A) the law of demand
• B) the law of supply
• C) the law of scarcity
• D) the law of increasing additional costs

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Definitions:

Predetermined Overhead Rate

A calculated rate used to estimate the manufacturing overhead cost per unit of production, based on expected costs and activity levels.

Manufacturing Overhead

Indirect factory-related costs that occur from manufacturing a product such as the cost of managing a factory.

Accumulated Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was put into use.

Predetermined Overhead Rate

A rate calculated before a period begins, based on the estimated cost of manufacturing overhead and an allocation base, used to assign overhead costs to products.