The ICP Index

question 112

Multiple Choice

The ICP index:

• A) uses a broad market basket that tries to represent the full cost of living across countries.
• B) is an imperfect measure because of cultural differences.
• C) is an imperfect measure because of typical weather and geographical differences.
• D) All of these statements are true.

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Definitions:

Unused Capacity

Refers to the available production or service facility resources that are not currently being used.

Predetermined Overhead Rate

A rate used in cost accounting to allocate manufacturing overhead costs to products based on a planned level of activity or driver, such as machine hours or labor hours.

Machine-Hours

A measure of production volume or activity based on the number of hours machines are in operation.

Unused Capacity

The available production capability that is not being utilized by a company.