Long Term Contracts for Inputs Can Lead to the Slow

question 60

True/False

Long term contracts for inputs can lead to the slow adjustment of input prices in response to changes in aggregate demand.

---

Definitions:

Direct Labor-Hours

The total hours of work directly spent on producing a specific product or service.

Variable Overhead

Overhead costs that fluctuate with changes in production level or business activity, such as utilities for machinery.

Efficiency Variance

The difference between the standard cost of labor or materials for actual production and the actual cost incurred, reflecting how efficiently resources are utilized.

Direct Labor-Hours

The total hours worked directly on the production of goods or delivery of services.