In Computing GDP

question 61

Multiple Choice

In computing GDP,

• A) expenditures on used goods are included.
• B) production added to inventories is excluded.
• C) the amount of production in the underground economy is imputed.
• D) the value of intermediate goods is included in the market price of the final goods.

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Definitions:

Labor Quantity Variance

The difference between the actual labor hours used in production and the standard hours expected, multiplied by the standard hourly labor rate.

Direct Labor

The cost of wages for employees who are directly involved in the production of goods or services.

Production Department

The division or area in a manufacturing facility where products are made or assembled.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity purchased.