Answer:
The correct answer to the following question is D) interest rates would be increased by the government when there is almost full employment in the economy.
Explanation:
When in the economy, business are producing close to productivity and in the nation there is almost full employment , then it can be said that the economy is booming . Which means there is good amount of money supply in the economy and people are spending robustly and that means the demand is high , which ultimately tells that the prices of goods and services are high.
So to cut the prices, government will increase the interest rate which will lead to the increase in cost of borrowing, and that will cause decrease in money supply and demand will ultimately fall, which leads to decrease in prices of goods and services.
Option D, Both A & C
Explanation:
A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85 . Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75 . If you are the manager, you should consider the $400,000 as a sunk cost, not relevant to the decision and should ignore the $400,000 fixed cost.
Sunk cost is the cost which is already incurred in past and does not have any significance in decision making.
A sunk cost is already incurred in the fields of economy and business decision-making and can not be recovered. Sunk costs are contrasted with future costs, which can be avoided if measures are taken.
Answer:
Amount of overhead debited to Work in Process Inventory is $364,000
Explanation:
Direct labor cost = Total labor cost - Indirect labor cost
Direct labor cost = $720,000 - $200,000 = $520,000
Overhead debited to Work in Process Inventory= 70% * Direct labor cost
=70% * $520,000
=$364,000
