An Industry with Four Firms Each Having a 25% Market

question 157

Multiple Choice

An industry with four firms each having a 25% market share would have a Herfindahl-Hirschman Index (HHI) of

• A)25.
• B)100.
• C)250.
• D)1,000.
• E)2,500.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard overhead estimated, based on the actual level of activity.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead costs, based on efficient use of resources.

Labor Rate Variance

The difference between the actual hourly wage paid to workers and the expected (or standard) wage rate, multiplied by the total hours worked.