A Change in the Technique for Producing an Existing Product

question 73

Multiple Choice

A change in the technique for producing an existing product is known as

• A) process innovation.
• B) an increase in productivity.
• C) invention.
• D) investment.
• E) product innovation.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business within a certain range of activity.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead.

Variable Costing

An accounting method that considers only variable costs as product costs and treats fixed costs as period costs.

Direct Costing

An accounting method that identifies variable costs directly associated with production and excludes fixed costs from product costing.