With Simple Costing Systems, Products Manufactured in Small Batches and in Small

question 110

Multiple Choice

With simple costing systems, products manufactured in small batches and in small annual volumes may be ________ because batch-related and product-sustaining costs are assigned using unit-related drivers.

• A)overcosted
• B)fairly costed
• C)costed the same as in activity-based costing
• D)undercosted
• E)ignored

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Definitions:

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Non-OPEC Oil

Oil produced by countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC), influencing global oil supply and prices.

World Market

The global exchange of goods, services, and finances, encompassing international trade and investment flows.

Cartel Price

The price level set by a cartel, where members agree to control supply to maximize their profits.