An Economy Can Increase Its Total Output of Goods and Services

question 1

Multiple Choice

An economy can increase its total output of goods and services if it

• A)increases the hours of work or output per hour.
• B)increases the hours of work or decreases output per hour.
• C)decreases hours of work or decreases output per hour.
• D)decreases hours of work and decreases output per hour.

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead estimated.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.