Joe Has a Full-Time Construction Job and Also Does Odd

question 73

Multiple Choice

Joe has a full-time construction job and also does odd jobs for people on the weekends.You have purchased the materials needed to construct a fence at your house and you pay Joe $500 to build the fence.Does the payment to Joe count toward the value of GDP?

• A) Yes, the fence increases the value of your house.
• B) Yes, all income earned counts in GDP.
• C) No, his is a non-market activity.
• D) No, if this income is not likely to be reported to the government.
• E) No, this is a leisure activity.

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Definitions:

Predetermined Overhead Rate

A calculated rate used to assign overhead costs to products or services, based on estimated or budgeted overhead expenses and activity.

Unit Product Costs

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

Predetermined Overhead Rate

The rate calculated before the accounting period begins, used to allocate overhead costs to products or job orders based on a consistent activity base.

Machine-Hours

A measure of production output or activity level, representing the total hours that machinery is operating over a specific period of time.