The Total Expense Incurred by a Firm in Producing and Marketing

question 153

Multiple Choice

The total expense incurred by a firm in producing and marketing its products or services; the sum of fixed cost and variable cost, is referred to as

• A)overhead.
• B)total cost.
• C)fixed costs.
• D)average cost.
• E)marginal cost.

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Definitions:

Activity-based Costing

A method of allocating indirect costs to products or services based on the activities that generate those costs.

Allocation Rate

A ratio or rate used to distribute overhead or indirect costs to various cost objects based on relevant criteria.

Setups

The preparation and adjustment processes required to make equipment ready for production or to switch production from one item to another, often involving significant time and cost.

Washing Mitt

A glove-like tool designed for washing surfaces, often used in car detailing and household cleaning.