Last Month a Firm Made 100 Model A's Using All

question 47

True/False

Last month a firm made 100 model A's using all of their available labor. If they have already taken orders for 150 model A's for next month, then their planning value must be 1.5.

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Definitions:

Fixed Costs

are expenses that do not change in response to the level of goods or services produced by a business, like rent or salaries.

Variable Costs

Expenses that change in proportion to the production or sales figures.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and labor expenses.

Total Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.