The Production Cycle Is Different Than the Revenue and Expenditure

question 2

Multiple Choice

The production cycle is different than the revenue and expenditure cycles for all the following reasons except

• A) there are no direct external data sources or destinations.
• B) cost accounting is involved in all activities.
• C) not all organizations have a production cycle.
• D) very little technology exists to make activities more efficient.

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Definitions:

Activity Rate

In cost accounting, this refers to the cost driver rate used in activity-based costing to allocate costs to products or services.

Machine Setups

The preparations and adjustments made to machines before starting a production run, potentially including configuration for different products.

Activity-Based Costing

A costing methodology that assigns expenses to products and services based on the activities that go into producing them.

Manufacturing Overhead

All manufacturing costs that are not direct materials or direct labor, including costs associated with running the factory such as utilities and maintenance.