A Customer Cost Hierarchy Categorizes Costs Related to Customers into Different

question 62

True/False

A customer cost hierarchy categorizes costs related to customers into different cost pools on the basis of different types of cost drivers,or cost allocation bases,or different degrees of difficulty determining cause-and-effect or benefits-received relationships.

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Definitions:

Marginal Cost

The expenditure required to produce an additional unit of a product.

Short-run Cost Function

An economic formula that describes how production costs change in the short term with varying levels of output, assuming some inputs are fixed.

Average Cost

The cost per unit of output, calculated by dividing total costs by the total quantity of output produced.

Ovens

Cookery appliances designed for baking, roasting, and heating food through the application of direct or indirect heat.