In the Long Run, a Firm Can Vary

question 233

Multiple Choice

In the long run, a firm can vary

• A) its capital but not its labor.
• B) its labor but not its capital.
• C) both its labor and its capital.
• D) neither its labor nor its capital.

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Definitions:

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operated.

Machine-Hours

A measurement used in cost accounting to allocate expenses to products or job orders, based on the number of hours machines are operated.

Direct Labor-Hours

An indicator of the cumulative hours spent by workers directly engaged in the production process.

Estimated Total Manufacturing Overhead

The projected sum of all indirect costs associated with the production process, not inclusive of direct labor or materials.