Under Variable Costing

question 15

Multiple Choice

Under variable costing

• A)only the quantity of products sold determines cost of goods sold.
• B)only the quantity of products produced determines cost of goods sold.
• C)both the quantity of products produced and sold determines cost of goods sold.
• D)neither the quantity of products produced or sold determines cost of goods sold.

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Definitions:

Marginal Product

The extra output generated from using an additional unit of a specific input, while keeping all other inputs unchanged.

Production Function

A mathematical model relating the quantity of output produced to the quantities of inputs used.

Bakery

A bakery is a business establishment that produces and sells flour-based food baked in an oven, such as bread, cookies, cakes, pastries, and pies.

Average Product

The output per unit of input, calculated by dividing total product (output) by the number of units of the input.