In a Decision to Add or Eliminate a Product or Service

question 114

Multiple Choice

In a decision to add or eliminate a product or service, which of the following is an avoidable cost?

• A)Common costs
• B)Depreciation
• C)Variable overhead
• D)Allocated overhead

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Definitions:

Production Goods

Items used in the manufacturing process to produce other goods, including raw materials, machinery, and components.

Support Products

Goods and services bought to be used in the production of other products or to facilitate an organization's operations.

Supplies

Materials, goods, or equipment required for the operation of a business or for completing a specific task.

Stationery

Writing materials and office supplies, such as paper, envelopes, and writing instruments, used for personal and business correspondence.