To Effectively Plan Variable Overhead Costs for a Product or Service,managers

question 9

Multiple Choice

To effectively plan variable overhead costs for a product or service,managers must focus attention on the activities that make a superior product and ________.

• A)create a balanced scorecard
• B)eliminate activities that do not add value
• C)instruct staff in time-saving initiatives
• D)calculate possible unused capacities
• E)curtail activities that are not absolutely necessary

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Definitions:

Direct Costs

Direct costs refer to expenses that can be directly attributed to the production of specific goods or services, such as raw materials and labor.

Cost Object

Any item for which a separate measurement of costs is desired, such as a product, service, project, or department.

Just-in-Time Manufacturing

A production methodology aimed at reducing flow times within production systems as well as response times from suppliers and to customers, by receiving goods only as they are needed in the production process.

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.