Table 13-10 Consider the Following Table of Long-Run Total Cost for Four

question 132

Multiple Choice

Table 13-10
Consider the following table of long-run total cost for four different firms

-Refer to Table 13-10.Which firm has constant returns to scale over the entire range of output?

• A)Firm 1
• B)Firm 2
• C)Firm 3
• D)Firm 4

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Definitions:

Direct Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standardized expected quantity, valued at the standard cost per unit.

Direct Materials

Raw materials that are directly traceable to the production of a specific product and are significant in cost.

Favorable

A term usually used in finance and accounting to describe results that are better than anticipated or that result in a benefit.

Standard Direct Materials Costs

The budgeted or standard cost of the raw materials required to produce a unit of product.