A Technological Advancement Has Just Occurred in the Computer Chip

question 306

Multiple Choice

A technological advancement has just occurred in the computer chip industry. In the computer chip market this will lead to

• A)an increase in price and a decrease in quantity.
• B)an increase in price and an increase in quantity.
• C)a decrease in price and a decrease in quantity.
• D)a decrease in price and an increase in quantity.

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Definitions:

Material Quantity Variance

The difference between the actual quantity of material used in production and the standard quantity expected to be used.

Direct Materials Purchased

The raw materials bought by a company that are directly used in the production of its goods.

Actual Variable Manuf. Overhead

The real costs incurred from indirect, variable production expenses, assessed after the production process is completed.

Variable Manufacturing Overhead

These are manufacturing overhead costs that vary with the level of production output, such as utilities or materials used in the manufacturing process.