When a Firm Uses Technological Improvements to Increase Output from the Same

question 24

Multiple Choice

When a firm uses technological improvements to increase output from the same amount of inputs, the result is

• A) a new production function.
• B) losses.
• C) guaranteed profits.
• D) diseconomies of scale.

---

Definitions:

Variable Overhead Rate Variance

Variable overhead rate variance is the difference between the actual variable overhead costs incurred and the expected (standard) costs, influenced by fluctuations in production activity levels.

Materials Price Variance

The difference between the actual cost of materials and the standard (or expected) cost, indicating how much more or less was spent on materials than was planned.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor at the standard rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting.