Which of the Following Statements Is Correct

question 63

Multiple Choice

Which of the following statements is correct?

• A)Overtime premiums should be treated as a component of manufacturing overhead.
• B)Overtime premiums should be treated as a component of direct labour.
• C)Idle time should be treated as a component of direct labour.
• D)Idle time should be accounted for as a special type of loss.
• E)Overtime premiums should be treated as a component of manufacturing overhead and as a component of direct labour.

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Definitions:

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Minimum AVC Point

The level of output at which a firm's average variable cost (AVC) is minimized.

Purely Competitive

A market scenario where numerous producers and consumers participate, making the individual impact on price negligible.

Average Total Cost

The total cost of production divided by the number of units produced, representing the average cost per unit of goods or services produced.