In Early 2010 Molly Paid $200,000 for a House Built

question 111

Multiple Choice

In early 2010 Molly paid $200,000 for a house built in 2000.She spent $30,000 on new materials to remodel the house.Although Molly lived in the house after she remodeled it,its rental value rose.Which of the following contributed to real GDP in 2010?

• A)the price of the house,the cost of remodeling materials,the increase in rental value
• B)the price of the house and the cost of remodeling materials,but not the increase in rental value
• C)the costs of the remodeling materials and the increase in rent,but not the price of the house
• D)None of the above are correct.

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated using inventory valuation methods such as FIFO, LIFO, or weighted average.

Budgeted Sales

Projected amounts of sales for a future period, used for planning and performance evaluation purposes.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and overhead.

Master Budget

A comprehensive financial plan that combines all of an organization's individual budgets (sales, production, overhead, etc.) into one master document.