Hyperinflation Is Defined as

question 46

Multiple Choice

Hyperinflation is defined as

• A)a constant inflation rate.
• B)any increase in the price level.
• C)a rising but low inflation rate.
• D)an inflation rate of 50 percent a month or higher.
• E)an inflation rate of 50 percent a year.

Understand the use of perpetual inventory system in determining the cost of issuance of materials.

Record transactions involving the purchase, use, and transfer of materials in a job order costing system.

Utilize job order cost information in decision making and analyze variances in material costs.

Understand the principles of job order costing in both service and manufacturing businesses.

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Definitions:

Long-run Average Total Cost

The cost per unit of output incurred when all factors of production, including physical capital, are variable.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total costs.

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.