Which Denominator-Level Concept Results in the Highest Amount of Fixed

question 38

Multiple Choice

Which denominator-level concept results in the highest amount of fixed manufacturing overhead costs per unit of ending inventory when seasonal demand is low?

• A)theoretical capacity
• B)practical capacity
• C)normal capacity
• D)master-budget capacity
• E)supply capacity

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Definitions:

Productivity

A measure of the efficiency of production, often calculated as the ratio of output (goods and services) produced per unit of input (labor, materials, energy) used.

Workers' Wages

The compensation paid to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis.

Wage Reductions

Actions taken by employers to decrease the amount of money paid to workers, often in response to economic pressure or to increase profitability.

OPEC Price Increases

Refers to occasions when the Organization of Petroleum Exporting Countries decides to raise the price of oil, affecting global economies and energy costs.