The Presence of Any of the Following Factors Would Suggest

question 149

Multiple Choice

The presence of any of the following factors would suggest a switch to ABC except when

• A) product lines differ greatly in volume.
• B) overhead costs constitute a major portion of total costs.
• C) the manufacturing process has changed significantly.
• D) production managers are using data provided by the existing system

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Definitions:

Markup

The uplift in the purchase price of items specifically to recover operational overhead and to make a profit.

Split-off Point

The stage in a production process where multiple products are derived from a single process or material, leading to separate further processing.

Joint Production Costs

Costs incurred in the process of producing two or more products simultaneously from the same raw materials or process.

Split-off Point

Refers to the stage in a production process where joint products can be recognized as separate products.