Adam Smith Used a Famous Example of What Type of Firm

question 283

Multiple Choice

Adam Smith used a famous example of what type of firm to illustrate economies of scale?

• A)Apple
• B)a pin factory
• C)a lumber mill
• D)a British university

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Definitions:

Overhead Volume Variance

The flexible budget at standard volume less the overhead applied. It is an estimate of the unused or overused fixed plant capacity.

Planned Overheads

The estimated costs of indirect materials, labor, and other expenses necessary to run operations that are budgeted for a specific period.

Actual Overheads

The real costs incurred in the day-to-day operation of a business, including utilities, rent, and maintenance.

Capacity Utilization

A measure of how effectively an entity is using its production or operational capacity.