FIGURE 8-2 -Refer to Figure 8-2.Increasing Returns to Scale Occur Over the Over

question 102

Multiple Choice

FIGURE 8-2
-Refer to Figure 8-2.Increasing returns to scale occur over the output range

• A)0 to Q₁ only.
• B)Q₁ to Q₂ only.
• C)Q₂ to Q₃ only.
• D)0 to Q_{3 only}.
• E)beyond Q_{3 only}.

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Definitions:

Revenue Variance

The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.

Activity Measure

An allocation base in an activity-based costing system; ideally, a measure of whatever causes the costs in an activity cost pool.

Average Actual Selling Price

The mean price at which goods or services have been sold, calculated over a specific period or volume of sales.

Spending Variance

The difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost. A favorable (unfavorable) spending variance occurs because the cost is lower (higher) than expected, given the actual level of activity for the period.