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

question 97

Multiple Choice

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

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

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Definitions:

Linehaul Truck

A type of truck specifically designed for the transportation of goods over long distances, often between cities or states.

Ladder Frame

A type of vehicle frame that resembles a ladder with two long rails connected by several cross-members.

Crossmember Braced

A structural reinforcement technique used in vehicles and machinery to provide added stability and strength to the crossmember, enhancing the overall rigidity of the frame.

C-Channel

The typical frame rail geometry used in heavy-duty trucks. It consists of an upper flange, lower flange, and web. A radius bend is used between the web and flanges.