Quantitative Analysis Methods Estimate Cost Functions

question 112

Multiple Choice

Quantitative analysis methods estimate cost functions:

• A)which depend on the experience and judgment of the analyst for accuracy
• B)based on analysis and opinions gathered from various departments
• C)using significant amounts of historical data
• D)using the pooling of knowledge from each value chain function

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Definitions:

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs related to operations such as utilities and salaries for managers.

Machine-Hours

A metric to quantify the operational time of machines in the production process, essential for calculating manufacturing costs and efficiency.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products, calculated before the accounting period begins based on estimated costs.

Variable Manufacturing Overhead

This refers to the production costs that change in proportion to the level of manufacturing activity.