Use the Following to Answer Questions

question 148

Multiple Choice

Use the following to answer questions
Figure: Determining Surplus
-(Figure: Determining Surplus) In the graph,which shape represents producer surplus?

• A) the triangle hik
• B) the line ij
• C) the line hi
• D) the triangle jik

---

Definitions:

Machine Hour

A measure of the amount of time a machine is operated, used in allocating manufacturing costs to products based on the number of hours the machines are used in production.

Normal Capacity

The average level of production or activity that a company can expect to achieve under normal conditions over a period.

Controllable Variance

The portion of variance in cost or revenue that can be directly managed or influenced by actions of the management.

Standard Factory Overhead Rate

A predetermined rate used to allocate expected overhead costs to individual units of product based on a standard cost system.