The Cost Hierarchy for an ABC System Includes

question 84

Multiple Choice

The cost hierarchy for an ABC system includes:
I. Unit-level activities
II. Marketing activities
III. Product-sustaining activities
IV. Administrative activities

• A) I and III only
• B) II and IV only
• C) I and II only
• D) III and IV only

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Definitions:

Price of Capital

This entails the expenses linked to acquiring and utilizing capital goods, such as machinery, indicating the return investors demand for use of their capital.

Cost-Minimizing

A strategy or process of finding the most efficient way to produce goods or services at the lowest possible cost.

Inputs

The resources (such as labor, capital, materials, and energy) used in the production process to produce goods and services.

Marginal Product

The increase in output that results from employing one more unit of a factor of production, holding all other factors constant.