COST ACCOUNTING
VARIABLE COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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All inputs are fixed
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All input are variable
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at least one input is variable and one input is fixes
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at most one input is variable and one input is fixed
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Detailed explanation-1: -The long run is a period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all costs, whereas in the short run firms are only able to influence prices through adjustments made to production levels.
Detailed explanation-2: -The long-run is the period when the firm has the freedom to adjust all factors of production to influence the total output. Hence, all factor inputs are variable in the long run.
Detailed explanation-3: -Answer and Explanation: The given statement is true. In economics, the long run is a time period in which all costs and factors of production are variable.
Detailed explanation-4: -From a long-run perspective, the amount of production equipment the company owns is a variable input. However, from a short-run perspective, the amount of production equipment is a fixed input and a limitation on the company’s operations, as it cannot be easily adjusted within the short-run time frame.
Detailed explanation-5: -Answer and Explanation: In the short run, the inputs such as labor is variable. However, the inputs such as capital, machinery, land etc are fixed and can not be changes. Hence, the statement is false.