-When Long-Run Average Cost Remains Constant as Output Increases There

question 301

Multiple Choice

-When long-run average cost remains constant as output increases there are constant

• A) marginal returns.
• B) returns to scale.
• C) economies of scale.
• D) diseconomies of scale.

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Definitions:

Plantwide Overhead Rate

A single overhead rate calculated by dividing total factory overhead by the total amount of the allocation base used across the entire plant.

Direct Labor

Labor costs associated with employees who are directly involved in the production of goods or the provision of services.

Predetermined Overhead Rate

A rate used to assign overhead costs to products or services, calculated by dividing estimated overhead by an allocation base such as labor hours.

Predetermined Overhead Rate

A pre-determined rate used to allocate manufacturing overhead expenses to products, based on a specified activity measure, and calculated prior to the start of a period.