Examlex
Which of the following activities generates the greatest potential for free riding?
Fixed Manufacturing Overhead
Costs associated with production that do not change with the level of output, such as rent for factory facilities or salaries of permanent staff.
Direct Materials
Raw materials that are traceable to the product and included in the direct costs of manufacturing.
Fixed Manufacturing Overhead
Represents the consistent costs associated with manufacturing that do not fluctuate with the level of production, such as rent, salaries, and equipment depreciation.
Direct Labor Cost
The wages and other compensation paid to employees who are directly involved in the production of goods or services.
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