If the Standard Hours Allowed Are Less Than the Standard

question 45

Multiple Choice

If the standard hours allowed are less than the standard hours at normal capacity, the volume variance

• A)cannot be calculated.
• B)will be favourable.
• C)will be unfavourable.
• D)will be greater than the spending variance.

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Definitions:

Short Run

In economics, a timeframe during which the quantity of at least one production factor cannot be increased.

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to changes in market conditions.

Average Total Cost Curve

A graphic representation showing the cost per unit of output produced, combining both fixed and variable costs.

Purely Competitive Firm

A firm that operates in a market where there are many buyers and sellers, all producing homogeneous products, leading to no single firm being able to influence market price.