The Reduction in Transactions Costs Per Dollar of Investment as the Size

question 16

Multiple Choice

The reduction in transactions costs per dollar of investment as the size of transactions increases is known as ________.

• A) discounting
• B) economies of scale
• C) economies of trade
• D) diversification

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Definitions:

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific products or projects based on their use of activities, leading to more accurate product costing.

Profitable Products

Products that generate more revenue than the costs involved in their creation, marketing, and distribution.

Time-based Activity-based Costing

An approach that combines the principles of activity-based costing with a focus on how much time activities consume, improving the accuracy of cost allocation.

Stage One Allocations

Stage One Allocations is a phase in cost accounting where overhead costs are allocated to different departments or cost centers before being assigned to specific products or services.