Firms __________ Output as Long as the Revenue from Additional

question 66

Multiple Choice

Firms __________ output as long as the revenue from additional production __________ the cost of that production.

• A)expand,is less than
• B)contract,is less than
• C)contract,exceeds
• D)expand,exceeds
• E)expand,is equal to

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Definitions:

Fixed Factory Overhead Volume Variance

A measure used in cost accounting to determine the difference between the budgeted and actual volume of production, affecting the allocation of fixed overhead costs.

Standard Direct Materials

The predetermined cost and quantity of raw materials expected to be used in the production process, used for budgeting and performance evaluation.

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, due to variations in production levels.

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the standards set for the production volume.