When Estimating the Total Cost of a One-Way Flight from New

question 132

Multiple Choice

When estimating the total cost of a one-way flight from New York to Los Angeles,what cost driver should be used?

• A) number of miles on flight
• B) number of passengers on flight
• C) number of pounds of baggage on flight
• D) number of passengers on flight times the number of miles on flight

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Definitions:

Cost of Goods Available

The total cost of inventory available for sale, calculated as the beginning inventory plus the cost of goods manufactured or purchased.

Overapplied Overhead

Occurs when the amount of overhead allocated to products exceeds the actual overhead incurred.

Cost of Goods Sold

The direct costs attributable to the production of the products sold by a company.

Finished Goods Inventory

The total value of goods that have completed the production process but have not yet been sold to customers.