If the Division Produces and Sells 350,000 Photo-Prints,its Total Expenses

question 113

Multiple Choice

If the division produces and sells 350,000 photo-prints,its total expenses would be?

• A) $525,000.
• B) $540,000.
• C) $615,000.
• D) $630,000.

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Definitions:

Target Cost

A cost-management strategy in which a product’s selling price and desired profit are used to determine the allowable cost to manufacture it, with the aim of ensuring competitiveness and profitability.

Cost Driver Analysis

The examination of the factors that affect costs, aiming to understand the relationship between actions or volumes and their impact on expenses.

Non-value-added Activities

Tasks or processes that do not contribute to customer value or enhance a product, potentially leading to unnecessary costs.

Activity-Based Management

A management approach focusing on managing activities as the route to improving the value received by the customer and the profit achieved by providing this value.