From a Purely Product-Costing Standpoint,department Rates and Activity-Cost-Driver Rates Will

question 88

True/False

From a purely product-costing standpoint,department rates and activity-cost-driver rates will give the same product costs if significant costs are incurred for different activities within a department but different outputs use resources from the different activities in the same proportions.

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Definitions:

Long-Run Scale

Refers to the time period in which all factors of production and costs are variable, allowing companies to adjust all inputs in response to market conditions.

Short-Run

A period in which at least one input is fixed, limiting the firm's capacity to adjust to changes in demand or market conditions.

Positive Profits

Financial gains that are greater than zero, indicating a company's revenues exceed its costs and expenses.

Variable Costs

Costs that change in proportion to the activity or volume of business, such as materials and labor.