Intel Makes Microchips from Raw Materials Acquired from Suppliers

question 145

Multiple Choice

Intel makes microchips from raw materials acquired from suppliers.Intel is a:

• A)service company.
• B)retail company.
• C)manufacturer.
• D)merchandising company.

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Definitions:

True Variable Cost

Costs that vary exactly with the level of activity or production volume, including direct materials and some elements of manufacturing overhead.

Fixed Cost

Costs that do not vary with the level of output or sales, remaining constant regardless of the business activity level, such as rent and salaries.

Period Cost

Expenditures that are not directly tied to the production process and are expensed in the period in which they are incurred.

Product Cost

The total expense incurred to produce and make ready for sale a product, including direct materials, labor, and overhead costs.