If the Cost of an Activity Increases with the Quantity

question 1

Multiple Choice

If the cost of an activity increases with the quantity of items used, it is which of the following?

• A)market-sustaining cost
• B)output unit-level cost
• C)batch-level cost
• D)product-sustaining (service-sustaining)costs
• E)facility-sustaining cost

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Definitions:

New Equipment

Capital assets recently acquired by a company for use in its operations, potentially enhancing productivity or efficiency.

Building Account

An account used to record the costs associated with the construction or purchase of a building over time, which may include materials, labor, and overhead.

Land Purchased

The act of buying land, which is considered a fixed asset and is recorded on the balance sheet at cost, without depreciation.

Intangible Asset

An asset that lacks physical substance, such as patents, trademarks, and goodwill, and provides economic benefits to its owner.