Returns to Scale Refers To

question 56

Multiple Choice

Returns to scale refers to:

• A)the increase in output that accompanies an increase in one input, all other inputs held constant.
• B)a change in a production process that enables a firm to achieve more output from a given combination of inputs.
• C)the number of units of increase in output that can be obtained from an increase in one unit of input.
• D)the percentage by which output will increase when all inputs are increased by a given percentage.

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Definitions:

Direct Labor-hours

The aggregate of hours expended by staff members actively participating in the manufacturing process, utilized to assign labor charges to various products.

Variable Overhead Efficiency Variance

This variance measures the difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate per hour.

Variable Overhead

Costs that vary in direct proportion to changes in the operational activity of a business, such as utility bills or raw material costs.

Budgeted Production

represents the amount of production planned for a future period as part of the budgeting process.