To Identify Costs That Relate to a Specific Product,an Allocation

question 122

Multiple Choice

To identify costs that relate to a specific product,an allocation base should be chosen that

• A)does not have a cause-and-effect relationship.
• B)has a cause-and-effect relationship.
• C)considers variable costs but not fixed costs.
• D)considers direct material and direct labor but not manufacturing overheaD.

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Definitions:

Production Possibilities Curve

illustrates the maximum achievable output of two goods with a given set of resources and technology, demonstrating the trade-offs and opportunity costs in production.

Inefficiently Employed Resources

Inefficiently Employed Resources refer to the use of resources in a way that does not maximize the potential output or productivity, often leading to wastage and lower economic efficiency.

Economize

The act of reducing expenditure or conserving resources to achieve efficiency in the allocation of resources.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world with limited resources, leading to the necessity of choice.