Factor X Is Used in the Production of Good Y

question 182

Multiple Choice

Factor X is used in the production of good Y. Which of the following will increase the demand for factor X?

• A)a decrease in the demand for Y
• B)a rise in the MPP of factor X
• C)a fall in the price of good Y
• D)a fall in the cost of employing factor X
• E)a and b

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Definitions:

Production Volume Variances

The difference between the budgeted and actual volume of production, impacting the allocation of fixed overhead costs.

Standard Costs

The predetermined, estimated costs of manufacturing a single unit or a number of products during a specific period for budgetary and inventory valuation purposes.

Unit Costs

The cost incurred to produce, store, or purchase one unit of a product or service.

Standard Costing Systems

Accounting methods that use standard costs for direct materials, labor, and overhead to assess the efficiency of operations.