A Reliable Cost Accounting System Is Necessary for Accurate Pricing

question 47

Multiple Choice

A reliable cost accounting system is necessary for accurate pricing. The traditional method of product costing, where the costs of direct materials, direct labor, and factory overhead are included in a finished product's total cost is called ________.

• A)absorption costing
• B)break-even pricing
• C)direct costing
• D)absorption pricing

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Definitions:

Major Industry

Denotes a leading sector of the economy that plays a significant role in economic development, characterized by a high level of output and employment.

Restructuring

The process of reorganizing a company's structure, operations, or finances with the aim of making it more profitable or better organized for its present needs.

AT&T Case

A major antitrust case decided in 1984 that broke up the American Telephone and Telegraph company (AT&T), which had run a domestic telephone monopoly across the entire United States for many decades, into 22 regional telephone operating companies.

U.S. Steel Case

A landmark antitrust legal case involving the United States Steel Corporation, which focused on monopolistic practices and competition law.