A Company Does Not Need to Know the Price of Each

question 7

Multiple Choice

A company does not need to know the price of each resource it employs if it wants to determine whether or not it is achieving

• A) technological efficiency.
• B) economic efficiency.
• C) accounting efficiency.
• D) managerial efficiency.

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Definitions:

Direct Materials

Raw materials directly attributed to the production of goods.

Conversion Costs

Costs in manufacturing that include both direct labor and overhead costs, specifically associated with the conversion of raw materials into finished goods.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.

Factory Overhead

All indirect costs associated with manufacturing, such as utilities, depreciation, and maintenance, not directly tied to production.