A 15 Percent Increase in the Price

question 15

Multiple Choice

A 15 percent increase in the price

• A)increases the value of a dollar by 15 percent.
• B)decreases the value of a dollar by about 13 percent.
• C)decreases the value of a dollar by 15 percent.
• D)decreases the value of a dollar by about 8 percent.

---

Definitions:

Direct Materials

Raw materials that are directly traceable to the production of a specific good or product.

Prime Costs

Refers to the direct costs of manufacturing a product, including direct materials and direct labor.

Conversion Costs

Expenses incurred when transforming raw materials into finished goods, typically including labor and overhead costs.

Direct Materials

Costs of raw materials that are directly involved in the manufacturing of a product and can be easily traced to it.