Transitivity of Preference Is an Assumption Made in Order to Convert

question 38

True/False

Transitivity of preference is an assumption made in order to convert constant sum data to rank order data.It implies that if brand A is preferred to brand B and brand B is preferred to brand C,then brand A is preferred to brand C.

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Definitions:

Variable Overhead Cost

Overhead costs that vary with the level of production or business activity, such as utilities or materials used in production.

Absorption Costing

A method of cost accounting that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

A costing method where only variable manufacturing costs are included in the cost of goods sold, with fixed manufacturing overhead treated as a period expense.

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.