Which of the Following Is True

question 220

Multiple Choice

Which of the following is true?
i.A price ceiling is inefficient but fair.
ii.A price floor is inefficient and unfair.
iii.A price support increases the quantity produced.

• A) only i
• B) only ii
• C) only iii
• D) i and ii
• E) ii and iii

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders.

Machine-Hours

The total time machines are operated within a certain period, often used to allocate manufacturing overhead.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of goods, such as salaries of supervisors and the cost of factory utilities.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity base.