Suppose the Input Costs Associated with Manufacturing Hair Replacement Treatments

question 57

Multiple Choice

Suppose the input costs associated with manufacturing hair replacement treatments decrease over time.This would lead to a(n) :

• A) increase in the supply of such treatments,lower prices,and an increase in the equilibrium quantity.
• B) decrease in the quantity supplied and lower prices.
• C) increase in demand and higher prices.
• D) decrease in the supply of such treatments,higher prices,and a decrease in the equilibrium quantity.

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remain constant regardless of the level of production, such as rent and salaries of permanent staff.

Denominator Activity

In managerial accounting, a measure of activity used to allocate fixed costs to cost objects.

Cost Per Unit

It represents the total cost incurred for producing, manufacturing, or acquiring a product divided by the number of units.

Volume Variance

A measure of the difference between the budgeted and actual volume of production, affecting costs or profitability.