If Long-Run Average Total Cost Decreases as the Quantity of Output

question 38

Multiple Choice

If long-run average total cost decreases as the quantity of output increases, the firm is experiencing

• A)economies of scale.
• B)diseconomies of scale.
• C)coordination problems arising from the large size of the firm.
• D)fixed costs greatly exceeding variable costs.

Identify the components and purposes of an overhead cost performance report.

Determine the appropriate input measures for preparing a flexible overhead budget.

Apply overheads to inventory using correct rates in a standard costing system.

Understand the concept of volume variance and its relevance to costing systems and cost control.

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