CVP Analysis Requires Costs to Be Categorized as

question 6

Multiple Choice

CVP analysis requires costs to be categorized as

• A)either fixed or variable.
• B)direct or indirect.
• C)product or period.
• D)standard or actual.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, often used as a basis for allocating costs to products.

Machine-Hours

A measure of production time, reflecting the total hours that machinery is operational during a specific period.

Multiple Overhead Rate

The use of more than one overhead rate to allocate a company's indirect costs more accurately than a single overhead rate.

Plantwide Overhead Rate

A single overhead absorption rate used throughout an entire plant or factory, applied uniformly to all cost objects.