Long-Run Average Total Cost Must Always Be

question 28

Multiple Choice

Long-run average total cost must always be

• A)rising
• B)declining
• C)greater than or equal to the marginal unit of variable cost
• D)greater than or equal to the short run average total cost
• E)less than or equal to short-run average total cost

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Definitions:

Underapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead costs are less than the actual costs incurred.

Overapplied Manufacturing Overhead

A condition where the allocated manufacturing overhead costs exceed the actual overhead expenses incurred.

Cost of Goods Sold

Cost of goods sold represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or jobs, computed before the costs are incurred, based on estimated rather than actual costs.