When a Manager Is Making a Decision Based on Cost

question 15

True/False

When a manager is making a decision based on cost figures, it is preferable that he (she)thinks in terms of unit costs.

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Definitions:

Customized Product

A product specially designed and made according to the specifications and requirements of a particular customer.

Work in Process Account

An account used to track the costs associated with unfinished products during the manufacturing process, including labor, materials, and overhead.

Direct Labor Cost

The cost of wages, benefits, and payroll taxes for employees who are directly involved in the production of goods.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual units of production.