Which Statement Is Correct About Overhead

question 91

Multiple Choice

Which statement is correct about overhead?

• A)Fixed overhead is expensed under absorption costing.
• B)Fixed overhead is never capitalized.
• C)Variable overhead is always capitalized.
• D)Fixed overhead is capitalized under absorption costing.

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Definitions:

Marginal Product

Marginal product refers to the additional output generated by employing one more unit of a specific factor of production, such as labor or capital.

Marginal Product

The increase in output resulting from a one-unit increase in the quantity of a particular input, holding all other inputs constant.

Total Product

The total output of goods or services produced by a firm or industry within a specified period.

Negative Marginal Returns

A situation where adding an additional factor of production results in lower output per unit.