The Difference Between the Value That an Activity Generates and the Cost

question 84

Multiple Choice

The difference between the value that an activity generates and the cost of the activity is called the ________.

• A)margin
• B)break-even point
• C)revenue
• D)value-addition

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Definitions:

Fixed Manufacturing Overhead

Costs that do not change with the level of production output and are essential for the manufacturing process, such as rent, property taxes, and salaries of permanent staff.

Unit Product Cost

The cost associated with producing a single unit of output, including direct materials, direct labor, and allocated overhead costs.

LIFO

"Last In, First Out," an inventory valuation method where the most recently produced or purchased items are the first to be expensed.

Absorption Costing

A costing method where all manufacturing costs including both direct costs like labor and materials and indirect costs like overhead are allocated to the product.