Which of the Following Statements Is a Definition of Standard

question 2

Multiple Choice

Which of the following statements is a definition of standard quantity of direct materials allowed for a period? Standard quantity of direct materials is

• A) the number of units of material that should have been used for expected (budgeted) production.
• B) the number of units of material that were used for actual production.
• C) the number of units of material that should have been used for actual production.
• D) the number of units of material required for each unit of production.

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Definitions:

Inferior Good

A good or service whose consumption declines as income rises, prices held constant.

Constant Costs

Costs that remain unchanged regardless of the level of production or activity.

Long-Run Equilibrium

A state in which all firms in a market are making zero economic profit, with no firm having an incentive to enter or exit the industry.

Allocative Efficiency

An economic state where resources are allocated in a way that maximizes the overall utility to society, ensuring that the goods and services produced match consumer preferences.