Economies of Scale and Economies of Scope Are Related and Occur

question 63

True/False

Economies of scale and economies of scope are related and occur for the same reason.

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Definitions:

Direct Labor

The wages paid to workers who are directly involved in the production of goods or services.

Manufacturing Overhead

Factory overhead expenses that arise during the production process of a product.

Accounts Receivable

The money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Step-Variable Cost

Costs that are fixed over a small range of activity but can change with significant changes in the volume of activity.