Suppose a Basket of Goods and Services Has Been Selected

question 181

Multiple Choice

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year.In 2012,the basket's cost was $77;in 2013,the basket's cost was $82;and in 2014,the basket's cost was $90.The value of the CPI in 2014 was

• A)109.8 and the inflation rate was 9.8%.
• B)109.8 and the inflation rate was 16.9%.
• C)116.9 and the inflation rate was 9.8%.
• D)116.9 and the inflation rate was 16.9%.

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Definitions:

Machining Department

A specialized division within a manufacturing operation that performs machining processes, such as cutting, shaping, or drilling materials.

Finishing Department

The last department in a manufacturing process where products are completed and made ready for sale.

Predetermined Overhead Rate

An estimated charge per unit of activity used to allocate manufacturing overhead costs to products, calculated before the accounting period begins.

Machine-Hours

Machine-hours represent a measure of production time, indicating the number of hours that machinery is in operation during a certain period.