An Expansion Occurs When ________, When ________, or When Both

question 29

Multiple Choice

An expansion occurs when ________, when ________, or when both of these occur.

• A)potential output grows rapidly; actual output rises above potential output.
• B)potential output grows slowly; actual output rises above potential output
• C)potential output grows rapidly; actual output equals potential output
• D)potential output grows slowly; actual output equals potential output

---

Definitions:

Machine Hours

A measure of production or work volume through the number of hours a machine is operated.

Variable Manufacturing Overhead

The costs of indirect manufacturing that vary with the level of production, such as utilities or materials used in production that are not directly traceable.

Indirect Labor

Indirect Labor is labor costs associated with employees who do not directly work on a product but contribute to the production process or service provision.

Fixed Overhead Costs

Costs that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance.