If a Cost Pool Is Homogeneous, the Cost Allocations Using

question 47

True/False

If a cost pool is homogeneous, the cost allocations using that pool will be the same as they would be if costs of each individual activity in that pool were allocated separately.

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Definitions:

AVC

Average variable cost, which is the total variable cost divided by the quantity of output produced.

Marginal Product Data

Information that shows how the addition of a single unit of a factor of production, such as labor or capital, affects total output.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which each supplier's offerings are perfectly substitutable by the consumers.

Profit-Maximizing Rule

A principle stating that firms achieve maximum profit when they produce goods or services to the point where marginal cost equals marginal revenue.