In Activity-Based Costing, All Overhead Is Lumped Together and a Predetermined

question 40

True/False

In activity-based costing, all overhead is lumped together and a predetermined overhead rate per unit of an allocation base, is computed and used to assign overhead to jobs and processes.

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Definitions:

MP

Short for Marginal Product, which is the additional output resulting from using one more unit of a particular input, holding other inputs constant.

MC

Marginal Cost, the change in total production cost that comes from making or producing one additional unit.

AP

Advanced Placement, a program offering college-level curriculum and examinations to high school students in various subjects.

Average Fixed Costs

Costs that remain constant in total regardless of changes in the level of production or output.