Consider the Production Possibilities Frontier Displayed in the Figure Shown

question 121

Multiple Choice

Consider the production possibilities frontier displayed in the figure shown.Which of the following statements is true?

• A) Producing at point D would be inefficient.
• B) Producing at point C would be inefficient.
• C) Producing at point B would be inefficient.
• D) Producing at point A would be inefficient.

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Definitions:

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.

Variable Manufacturing

Costs in manufacturing that change in proportion to the volume of production, such as materials and labor.

Materials Price Variance

The difference between the actual cost of materials used in production and the budgeted cost of materials, based on standard prices and actual quantities purchased.