The Slope of the Consumption Function Is

question 117

Multiple Choice

The slope of the consumption function is

• A) less than the slope of the 45-degree line but not equal to zero.
• B) greater than the slope of the 45-degree line.
• C) equal to the slope of the 45-degree line.
• D) equal to zero.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to complete a task, multiplied by the standard hourly labor rate.

Materials Price Variance

The discrepancy between the real expense of direct materials employed in manufacturing and the anticipated standard expense for those materials.

Materials Quantity Variance

The difference between the budgeted and actual quantities of materials used in production, affecting cost management.

Standard Cost

A predetermined cost of manufacturing, calculated based on the expected costs of material, labor, and overhead for a unit of product.