If Microsoft Is Thinking About Building a New Factory, It

question 115

Multiple Choice

If Microsoft is thinking about building a new factory, it is making a

• A) Long-run decision that will definitely enhance its profit.
• B) Long-run decision that may enhance its profit.
• C) Short-run decision that will definitely enhance its profit.
• D) Short-run decision that may enhance its profit.

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Definitions:

Unfavorable

A term often used in budgeting and financial analysis to describe results that are worse than expected or budgeted figures.

Variable Overhead Costs

Costs that fluctuate with changes in production volume or activity levels, such as utilities or raw materials, contrasting with fixed costs.

Fixed Overhead Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.

Standard Costs

Predetermined costs for products and services, used as a benchmark to measure actual operational performance.