Which of the Statements Below Is False Regarding Special Order

question 35

Multiple Choice

Which of the statements below is false regarding special order decisions?

• A)A fixed?cost element of an identical amount that is common among all alternatives is essentially irrelevant.
• B)Fixed cost per unit is equal to total fixed costs divided by a selected volume level.
• C)The contribution approach offers more detailed information than does the absorption approach.
• D)Fixed cost per unit is a necessary piece of information in the decision?making

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Definitions:

Variable Costing

An accounting method that assigns only variable production costs to products - those costs that fluctuate with the level of production, such as raw materials and labor.

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) divided by the number of units produced.

Unit Product Cost

It represents the total cost to produce one unit of product, including direct materials, direct labor, and manufacturing overhead.

Variable Costing

An accounting method that includes only variable production costs (material, labor, and overhead) in product costs, with fixed overhead expenses treated as period costs.