Which One of the Following Statements Is MOST Accurate

question 87

Multiple Choice

Which one of the following statements is MOST accurate?

• A) Factors of production can only be over-employed in the short run.
• B) Factors of production can only be under-employed in the short run.
• C) Factors of production can be over- or under-employed in the long run.
• D) Factors of production can be over- or under-employed in the short run.
• E) Factors of production are fully employed in the short run.

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Definitions:

FIFO Method

First-In, First-Out, an inventory valuation method where the costs of the oldest inventory items are recorded as sold first.

Conversion Activity

Processes that transform raw materials into finished products, including manufacturing, assembling, and packaging operations.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs required to convert raw materials into finished goods.