In the Short Run,when Are a Firm's Fixed Costs Equal

question 96

Multiple Choice

In the short run,when are a firm's fixed costs equal to zero

• A)if it incurs no variable costs
• B)if it produces no output
• C)if it incurs profits
• D)fixed costs are always greater than zero

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Definitions:

Departmental Overhead Rate

A rate used to allocate indirect costs to products or services, calculated separately for each department within an organization.

Mixing Department

A section within a manufacturing facility where raw materials are combined or processed together to create a product or a component of a product.

Machine Hours

A measure of production time, calculated by the number of hours a machine is operated in the production of goods.

Activity-Based Costing

A pricing approach that allocates overhead and indirect expenses to distinct activities, resulting in more precise product cost calculations.