Compared to the Productive Efficiency of a Perfectly Competitive Firm

question 116

Multiple Choice

Compared to the productive efficiency of a perfectly competitive firm, a monopolist tends to be

• A)very efficient because it charges a higher price
• B)more efficient because it produces greater output
• C)inefficient
• D)equally efficient, as it also produces where MR = MC
• E)very efficient because it conserves resources by producing less output

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Definitions:

FOH Volume Variance

A measurement in managerial accounting that compares the budgeted factory overhead for actual production volumes against the applied factory overhead based on standard costing.

FOH Budget Variance

The difference between the actual factory overhead costs incurred and the overhead costs allocated to production based on budgeted rates.

Fixed Manufacturing Overhead

Costs that do not change with the level of production, including salaries, rent, and insurance.

Labor Efficiency Variance

A discrepancy between the actual working hours and the expected standard hours, multiplied by the predetermined salary rate.