Which Would Be a Cost Driver for a Facility-Level Activity

question 142

Multiple Choice

Which would be a cost driver for a facility-level activity?

• A) Number of setups
• B) Number of product designs
• C) Square footage
• D) Number of purchase orders

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Definitions:

Normal Return

The minimum profit necessary for a company to remain viable in its industry, often considered the opportunity cost of capital.

Own Capital

The value of the assets owned by a company or individual that are used in the production process or for investment purposes.

Short Run

A period in which at least one of a firm's inputs is fixed, limiting the firm’s ability to increase production.

Industry Entry

The act of beginning or entering into a specific market or field of business.