Suppose the Consumption Schedule Is: C = 20

question 122

Multiple Choice

Suppose the consumption schedule is: C = 20 + .9Y,where C is consumption and Y is disposable income.
-Refer to the above data.At an $800 level of disposable income,the level of saving is:

• A) $180
• B) $740
• C) $60
• D) $18

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Definitions:

Spending Variance

The difference between the actual amount spent on a budget item and the amount that was expected or budgeted.

Indirect Labor

The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process.

Spending Variance

This refers to the difference between the budgeted amount of spending and the actual amount spent.