Which of the Following Is True

question 25

Multiple Choice

Which of the following is true?

• A) Economic efficiency occurs if the maximum feasible amount of output is achieved from a given quantity of inputs.
• B) Economic efficiency depends only on what is feasible.
• C) If production is technologically efficient then it must be economically efficient.
• D) None of the above statements are correct.

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Definitions:

Spending Variance

The difference between the actual amount spent on a budget item and the amount that was expected or budgeted.

Indirect Labor

The labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process.

Spending Variance

This refers to the difference between the budgeted amount of spending and the actual amount spent.