To Respond to Their Environment, Managers and Companies Have a Number

question 90

Essay

To respond to their environment, managers and companies have a number of options, which can be grouped into three categories. Describe each of these categories.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on the activities they require.

Fixed Overheads

Expenses that remain constant regardless of production or sales volumes within a specific time frame, like lease payments or wages.

Cost Behaviour

The manner in which a cost changes in relation to changes in business activity levels.

Manufacturing Overhead

All indirect costs associated with the production process, such as the cost of utilities, maintenance, and factory equipment depreciation.