Benefits of the Single-Rate Method Include

question 52

Multiple Choice

Benefits of the single-rate method include

• A)the low cost of implementation.
• B)fixed costs that are transformed into variable costs for user decision making.
• C)signals regarding how variable and fixed costs behave differently.
• D)information that leads to outsourcing decisions that benefit the organization as a whole.
• E)there is a stronger cause and effect relationship.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service, a crucial concept for decision-making in business and economics.

Variable Costs

Costs that vary directly with the level of production or output, such as raw materials and labour costs.

Variable Costs

Costs that change in proportion to the level of output or business activity, such as materials and labor directly involved in production.

Advertising Costs

Expenses incurred in promoting a product, service, or brand to potential customers.