If Activity-Based Costing Is Used, Electricity Usage Would Be an Example

question 27

Multiple Choice

If activity-based costing is used, electricity usage would be an example of a

• A)unit-level activity.
• B)batch-level activity.
• C)product-level activity.
• D)facility-level activity.

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Definitions:

Opportunity Costs

The value of the best alternative forgone when a decision is made to pursue a certain action.

MR

Marginal Revenue, the increase in revenue that results from selling one additional unit of a product.

Average Total Costs

The total cost of production divided by the quantity produced, representing the per-unit cost of production.

Average Variable Costs

The sum of all variable production expenses divided by the amount of output generated.