-In the Above Figure, If the Firm Increases Its Output

question 36

Multiple Choice

-In the above figure, if the firm increases its output from Q2 to Q3, it will

• A) reduce its marginal revenue.
• B) decrease its profit.
• C) increase its marginal revenue.
• D) increase its profit.

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Definitions:

Total Cost Variance

This refers to the difference between the budgeted or standard cost of production and the actual cost incurred.

Factory Overhead Cost

All indirect costs associated with manufacturing, excluding direct materials and direct labor. These can include utilities, maintenance, and salaries of non-direct labor employees.

Variance Report

A document that compares actual financial performance to planned or budgeted performance, highlighting variances between these figures.

Machine Hours

A measure of the operating time of machines or equipment, typically used in allocating manufacturing costs.