Start Up Costs Are

question 20

Multiple Choice

Start up costs are:

• A)irrelevant in firm decision making because they are sunk costs.
• B)inversely related to variable costs.
• C)one-time costs of starting production of a new product.
• D)always greater than marginal costs.

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Definitions:

Quantity Standard

A predetermined measure of the amount of input that should be used in the production of a single unit of product or service.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the expected (or standard) amount based on efficient operations.

Standard Costing System

A cost accounting system that uses cost estimates for material, labor, and overhead to calculate a standard cost for products.

Variable Manufacturing Overhead

Manufacturing costs that vary in direct proportion to changes in production volume, such as utilities and indirect materials.