When Product Costs Are Used for Decision-Making, What Assumption Is

question 20

Multiple Choice

When product costs are used for decision-making, what assumption is most likely to distort the decisions?

• A) There is a proportionality of overhead costs and output, regardless of whether a product is dropped or not.
• B) Some overhead estimates can decrease when a product is dropped.
• C) Some overhead costs could be fixed when a product is dropped.
• D) The cost accounting system treats all overheads as if it were variable with respect to the allocation base.

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Definitions:

Directional Terms

Descriptive phrases used in anatomy to explain the locations and positions of structures relative to each other.

Left

A direction or side that is opposite to right, often associated with the left side of the body or objects.

Abdominopelvic Cavity

An anatomical space in the human body that houses both the abdominal and pelvic organs, including the stomach, liver, and bladder.

Parietal Peritoneum

The outer layer of the peritoneum that lines the abdominal and pelvic cavities, not directly in contact with the organs.