__________Are Achieved When the Average Unit Cost of a Good

question 34

Multiple Choice

__________are achieved when the average unit cost of a good or service decreases as the capacity and/or volume of throughput increases.

• A) Unfocused factories
• B) Safety capacities
• C) Diseconomies of scale
• D) Economies of scale

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Definitions:

Direct Method

A cost allocation method that assigns service department costs directly to production departments without any intermediary allocations.

Service Department Costs

Expenses associated with departments that do not directly produce goods but provide essential services to those that do, like maintenance and security.

First-In, First-Out Method

An inventory valuation method where goods first received are the first to be sold or used, assuming that older inventory is sold before newer stock.

Cost Reconciliation Report

A document that analyzes and reconciles the differences between the cost of beginning inventory, the cost of goods manufactured, and the cost of goods sold.