The Fundamental Cost Objects of ABC Are ________

question 90

Multiple Choice

The fundamental cost objects of ABC are ________.

• A) activities
• B) cost drivers
• C) products
• D) services

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Definitions:

Diseconomies of Scale

The phenomenon where increasing production leads to an increase in the average costs of production, opposite of economies of scale.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Constant Returns to Scale

The condition where increasing all inputs by a certain factor leads to an increase in output by the same factor, indicating linear scalability in production processes.

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.