Marginal Cost Is the Additional Cost Resulting from Producing and Selling

question 121

True/False

Marginal cost is the additional cost resulting from producing and selling one additional unit.

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Definitions:

High-low Method

An approach used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Variable Utilities Cost

Expenses for utilities that fluctuate based on consumption levels, such as water, electricity, and gas.

Machine Hour

This term typically refers to the amount of time a machine is operating or available for production in a manufacturing process.

Cost-volume-profit Analysis

A managerial accounting method used to estimate the impact of different levels of cost and volume on operating profit.