Advantages of Using the Full Cost of the Product as the Cost

question 142

Multiple Choice

Advantages of using the full cost of the product as the cost base include all of the following EXCEPT that:

• A)managers are informed regarding the minimum long-run cost they need to recover to stay in business
• B)it limits the ability of a salesperson to cut prices
• C)fixed cost allocations can be arbitrary
• D)it does not require a detailed analysis of cost behavior for computations

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Definitions:

Low-Amperage Circuits

Electrical circuits designed to carry a small amount of electrical current, often for delicate electronic devices or low power applications.

Resistance

The opposition offered by a material or device to the flow of electrical current, measured in ohms.

Decrease

A reduction in size, quantity, or degree.

Increase

A rise in the quantity or value of something.