The Long Run Refers to a Period of Time Over

question 30

Multiple Choice

The long run refers to a period of time over which:

• A) the firm can change its level of output.
• B) only one input is fixed.
• C) production technology increases.
• D) all inputs are variable.

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Definitions:

Variable Manufacturing Overhead

Costs that vary with manufacturing output, including items like indirect materials and utilities required for production processes.

Direct Labor-Hours

The total hours of labor directly involved in producing goods or services, which is often used as a base for allocating overhead costs.

Variable Manufacturing Overhead

Costs that vary with the level of manufacturing activity, including items like indirect materials and utilities.

Fixed Manufacturing Overhead

These are the manufacturing costs that do not vary with the volume of production, including costs like rent, insurance, and salaries for certain employees.