Product Lines That Produce Different Variations (Models,styles,or Colors)often Require Specialized

question 104

Multiple Choice

Product lines that produce different variations (models,styles,or colors) often require specialized manufacturing activities that translate into ________.

• A) fewer indirect costs for each product line
• B) decisions to drop product variations
• C) a greater number of direct manufacturing labor cost allocation rates
• D) greater overhead costs for each product line

---

Definitions:

Relevant Range

The span within which the assumptions about fixed and variable cost behaviors are valid.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Variable Costing

An accounting method that only includes variable production costs (materials, labor) in product cost, excluding fixed costs.

Mixed Cost

A cost that has both fixed and variable components, which changes with the level of output but not in direct proportion.