Which of the Following Conditions Could Lead to an Inefficient

question 401

Multiple Choice

Which of the following conditions could lead to an inefficient quantity of pretzels being produced?

• A) the existence of many producers of pretzels
• B) the existence of many consumers of pretzels
• C) the existence of a single producer and seller of pretzels
• D) All of the above conditions could cause the actual quantity of pretzels to be an inefficient quantity.

---

Definitions:

Sales Revenue

The income received from selling goods or services, which may include discounts and deductions for returned merchandise.

High-low Method

A method applied in cost accounting that calculates variable and fixed costs by analyzing the most and least active periods.

Variable Cost

Variable cost varies directly with the level of output, including costs such as raw materials and direct labor, adjusting according to production volume.

Machine Hours

A measure of the time machines are run in the manufacturing process, used to allocate manufacturing overhead costs.