The Markup Determined by Management Should Be Sufficient to Earn

question 33

Multiple Choice

The markup determined by management should be sufficient to earn:

• A) manufacturing cost plus the selling and administrative expenses.
• B) the desired profit plus cover any costs and expenses that are not included in the cost amount.
• C) only costs and expenses that are not included in the cost amount.
• D) only the desired profit.

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Definitions:

Activity-based Management

A management approach focusing on managing activities as a way to improve customer value and profit by improving the efficiency and effectiveness of those activities.

Waste

Any unusable materials or substances involved in a process which are produced as a by-product and often require disposal.

Processing Time

The duration required to complete a particular process or activity, often used in manufacturing and operational analysis.

Unit-level Activities

Activities in cost accounting that vary with the number of units produced, such as operating machinery for each unit.