Lump-Sum Allocations

question 120

Multiple Choice

Lump-sum allocations

• A)generally changes year after year.
• B)do not change when the activity levels of any of the user departments change.
• C)are impacted by the usage of the allocated resource by other departments.
• D)make fixed costs appear variable.

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Definitions:

Labor

The effort by humans to produce goods or services in exchange for wages or other compensation.

Marginal Product

The additional output produced by using one more unit of a production input, holding all other inputs constant.

Employment

The condition of having a paid job or occupation, involving a contract between an employer and an employee that provides compensation for work performed.

Marginal Product

The additional output that is produced by adding one more unit of a variable resource, such as labor or capital, to the production process.