Match the Cost Driver in the Right Column Below to the Appropriate

question 57

Short Answer

Match the cost driver in the right column below to the appropriate function in the left column.
A)Number of shipments
B)Number of purchase orders
C)Number of employees
D)Number of customers
E)Number of desktop computers
F)Number of invoices
-Computer Support

• A)Number of shipments
• B)Number of purchase orders
• C)Number of employees
• D)Number of customers
• E)Number of desktop computers
• F)Number of invoices
• -Computer Support

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Definitions:

Tolerances

The permitted variations in measurements or physical characteristics in the manufacturing or production of goods.

Economies of Scale

Economies of scale describe the reduction in per-unit cost that a company benefits from as it scales up production. This cost benefit is due to the fixed costs spreading over a larger number of units.

Economies of Scope

Cost advantages that enterprises obtain by producing a wide range of products, diversifying their output, and sharing production inputs.

Economies of Scope

Cost advantages that enterprises obtain due to the efficient production of a wide range of products rather than specializing in a single product or service.