A Highly Automated Plant Would Generally Have

question 54

Multiple Choice

A highly automated plant would generally have

• A) more variable than fixed costs.
• B) more fixed than variable costs.
• C) all fixed costs.
• D) all variable costs.

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Definitions:

Target Costing

Target costing involves setting a planned cost for a product and then designing the product’s development cycle to meet this cost to maintain profitability.

Desired Return

The target profit or return a company aims to achieve on investment or sales.

Selling Price

The price of a good or service is established based on considerations like the cost of production, the level of demand in the market, and the presence of competitive products or services.

Absorption Costing

A costing method within accounting that considers all costs involved in manufacturing—including direct materials, direct labor, and all overhead (variable and fixed)—in establishing a product’s price.