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Answer:
A. does not change when real GDP changes.
Explanation:
The aggregate expenditure model is the sum total of all the expenditure undertaken in the economy by the factors during given period of time. It assumes that planned spending is equal real GDP and is given by marginal propensity to purchase. As increase income lead to increase in spending, however, we expect marginal propensity to spend to be less than 1. It also assume that only component of aggregate expenditure that may not be planned is investment.
Aggregate expenditue (AE)=
Explanation:
Line m is parallel to line n.
m-
n
LOCO
5 16
74
5.3
Answer: 1. $84 per hour
2. $25.20 per unit
Explanation:
The conversion costs are manufacturing or the production costs that are necessary to convert raw materials into final products.
1. The budgeted cell conversion cost per hour will be:
= Budgeted Conversion Cost/Planned Hours of Production
= $252,000 ÷ 3000
= $84 per hour
2. The budgeted cell conversion cost per unit will be:
= Manufacturing Time × Cell Conversion Cost Rate
= 18/60 × $84
= $25.20 per unit
Yes the costs should be included in the cash flow analysis because it wouldn’t be allocated if it didn’t include the cash flow.