When Diseconomies of Scale Occur

question 274

Multiple Choice

When diseconomies of scale occur,

• A)the long-run average total cost curve falls.
• B)marginal cost intersects average total cost.
• C)the long-run average total cost curve rises.
• D)average fixed costs will rise.

Identify and differentiate between joint ventures and joint operations based on their structure and contractual rights and obligations.

Understand the requirements for entering into joint arrangements, including risk management, access to new technology or markets, and control over the arrangement.

Recognize the components and considerations involved in the contracts of joint arrangements.

Comprehend the accounting treatments for contributions and transactions within joint operations, including initial recognition, profit recognition, depreciation, and impact on financial statements.

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Definitions:

Order Filling

The process involved in gathering and packaging goods or materials to fulfil customer orders.

First Stage Allocations

The initial step in activity-based costing where overhead costs are allocated to various activities.

Overhead Cost

General operating costs not directly tied to a specific product or service, including utilities, rent, and administrative salaries.

Order Filling

The process of completing customer orders, including picking, packing, and shipping the requested items.