As Output Expands Beyond the Break-Even Point,the Vertical Distance Between

question 242

Multiple Choice

As output expands beyond the break-even point,the vertical distance between the AVC and ATC will

• A)get larger.
• B)remain constant.
• C)get smaller.

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Definitions:

Materials Quantity Variance

Materials Quantity Variance is the difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit, indicating efficiency in material usage.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed for the actual production, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual costs of labor and the expected (or standard) costs, based on the standard labor rate.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate, highlighting efficiency in labor.