If Information About the Total Cost Is Not Given for Every

question 50

Multiple Choice

If information about the total cost is not given for every possible 1 unit change in quantity,marginal cost can still be computed as

• A) the price of labor divided by the quantity of labor.
• B) the price of labor divided by the marginal product of labor.
• C) fixed cost divided by the marginal product of labor.
• D) variable cost divided by the marginal product of labor.

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Definitions:

Process Costing

A costing method used when homogeneous products are produced on a continuous basis.

Job-order Costing

A cost accounting system used to assign manufacturing costs to an individual product or batches of products, typically used in custom or varied production.

Homogeneous Product

A product that is uniform in quality and indistinguishable from other products of the same type.

Weighted-Average Method

A process costing method that calculates unit costs by combining costs and outputs from the current and prior periods.