Which of the Following Statements Is Correct

question 13

Multiple Choice

Which of the following statements is correct?

• A)Full costing takes into account all resources sacrificed to achieve a specific objective.
• B)Full costing only takes into account manufacturing costs.
• C)Only variable costs are required to determine the selling price for a product.
• D)Full costing cannot be used in the service industries.

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of production, such as materials and labor.

Fixed Cost

Expenses that do not change in relation to production volume, such as rent, salaries, and insurance premiums.

Theory of Constraints

A methodology that focuses on identifying and managing the most significant limiting factor (constraint) that stands in the way of achieving a goal.

Recognizing Constraints

The process of identifying and acknowledging the limitations or restrictions that impact the efficiency and effectiveness of a system, project, or process.