A Production Function May Exhibit

question 36

Multiple Choice

A production function may exhibit

• A)constant returns to scale and diminishing marginal productivities to all inputs.
• B)constant returns to scale and diminishing marginal productivities to all but one input,but at least one input must have a constant marginal productivity.
• C)constant returns to scale and diminishing marginal productivity to at most one input.
• D)constant returns to scale and diminishing marginal productivities for no inputs.

---

Definitions:

Machine Hours

A measure of the amount of time a machine is run during a specific period, often used as a basis for allocating manufacturing overhead.

Overapplied

Overapplied refers to a situation where the overhead allocated to products or services exceeds the actual overhead costs incurred, usually in manufacturing settings.

Underapplied

A term often used in accounting to refer to a situation where the allocated costs are less than the actual costs incurred.

Job Order Cost System

An accounting system that accumulates manufacturing costs separately for each job or order, tracking direct labor, direct materials, and applied overhead.