The Additional Cost Incurred as the Cost Driver Increases by One

question 2

Multiple Choice

The additional cost incurred as the cost driver increases by one unit is:

• A)Average cost.
• B)Controllable cost.
• C)Variable cost.
• D)Unit cost.

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Definitions:

Job-order Costing

A costing method used to track costs specifically associated with a given job or project, allowing for detailed monitoring of expenses.

Predetermined Overhead Rate

A calculated rate used to charge overhead costs to products or job orders, determined by dividing estimated overhead costs by an allocation base.

Manufacturing Overhead

All indirect costs associated with the production process, like maintenance, utilities, and quality control.