When Supply Decreases

question 211

Multiple Choice

When supply decreases,

• A) price falls with no change in quantity demanded.
• B) price rises and quantity demanded decreases.
• C) price falls and quantity demanded increases.
• D) demand decreases so that price remains the same.
• E) price rises and demand increases.

Comprehend the distinction between direct and indirect materials requisitions and their recording.

Recognize the use of time tickets for assigning direct labor costs to jobs.

Differentiate between the documents used for receiving and requisitioning materials.

Grasp the journal entry process for recording materials (both direct and indirect), labor, and overhead costs.

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Definitions:

Supervisory Costs

Expenses related to the oversight and management of employees or production processes.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, useful for planning and controlling costs.

Responsibility Reports

Financial reports that measure the performance of departments and managers within an organization, emphasizing accountability.

Investment Center

A business unit or division that is responsible for its own revenues, expenses, and assets, and is evaluated based on its return on investment.