Which of the Following Does Activity-Based Costing Consider to Be

question 185

Multiple Choice

Which of the following does activity-based costing consider to be the fundamental cost object?

• A)Direct labor hours
• B)Activities
• C)Direct materials
• D)Finished goods

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Definitions:

Market Price

the current price at which a good or service can be bought or sold, determined by supply and demand forces in the market.

Average Total Cost

The sum of fixed and variable production costs divided by the total amount of produced goods.

Long-run

A time period in which all factors of production, including capital, are variable, allowing full industry adjustment.

Price Discrimination

A pricing strategy where a seller charges different prices to different customers for the same product or service, based on factors other than the cost of production.