The Term Shutdown

question 103

Multiple Choice

The term shutdown

• A)and the term exit both refer to short-run decisions that a firm might make.
• B)and the term exit both refer to long-run decisions that a firm might make.
• C)refers to a short-run decision that a firm might make, whereas the term exit refers to a long-run decision that a firm might make.
• D)refers to a long-run decision that a firm might make, whereas the term exit refers to a short-run decision that a firm might make.

---

Definitions:

Underapplied

Underapplied refers to a situation where the allocated or estimated costs for a particular period are less than the actual costs incurred.

Overapplied

A situation where the allocated overhead costs for production exceed the actual overhead expenses incurred.

Direct Materials

Basic substances that can be directly linked to the production process of a good.

Direct Labor

Labor costs that can be directly traced to the production of specific goods or services, such as wages for assembly line workers.