Portland,Inc

question 125

Multiple Choice

Portland,Inc.has formed four activity cost pools: Product Design,Machining and Production,Machine Setup,and Inspection.Gina Taylor,Production Manager at Portland,oversees processes that are considered part of Machining and Production,Machine Setup,and Inspection.Taylor's salary should be:

• A)assigned to the activity she spends the most time on.
• B)considered as a separate activity.
• C)expensed in the period incurred.
• D)allocated among Machining and Production,Machine Setup,and Inspection.

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Definitions:

Competitive Firm

A company that operates in a market with many buyers and sellers, where no single entity has the power to dictate prices for goods and services.

Production Function

An economic model that describes the relationship between input resources and the output of goods for a specific period.

Short-Run Cost Function

A representation of how total production costs change with output levels in the short term, when some factors are fixed.

Quasi-Fixed Costs

Costs that are not directly variable with the level of output but can change over time with scale of operations, such as salaries for permanent staff.