Economies of Scale Can Occur as a Result of Which

question 64

Multiple Choice

Economies of scale can occur as a result of which of the following?

• A) increasing marginal returns as the firm increases its size
• B) lower fixed cost as the firm increases its size
• C) management difficulties as the firm increases its size
• D) greater specialization of labor and capital as the firm increases its size
• E) increased total cost when the firm increases its size

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Definitions:

Unit Product Costs

Unit product costs are the total expense incurred to produce, store, and sell one unit of a product, including material, labor, and overhead rates.

Job M825

A specific task or project identified by a unique code, in this case, M825, likely within a job costing system.

Markup

The disparity between a product or service's cost and its retail price, represented as a percentage increase from the cost.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on the relationship between estimated overhead costs and an allocation base.